Late Converger Stall

The "Late Converger Stall" refers to a phenomenon in which economies that begin industrializing and modernizing later than early industrialized nations experience a plateau or stagnation in their economic growth trajectory after a period of rapid development. This concept is particularly relevant to developing economies striving to catch up with advanced nations. Late convergers often benefit initially from the transfer of technology, access to global markets, and learning from the developmental paths of early industrializers. However, as these economies approach middle-income or advanced stages of development, they face unique challenges that can slow or stall growth.

One critical factor contributing to the stall is the diminishing returns of adopting external technologies and practices. While the early stages of industrialization are marked by significant productivity gains, these benefits taper off as economies exhaust the "easy" gains from imitation and require innovation-driven growth. Many late convergers struggle with fostering indigenous innovation due to inadequate investment in research and development (R&D), weak institutional frameworks, or insufficiently skilled labor forces. Moreover, these economies often face structural bottlenecks such as infrastructure deficits, poor governance, and regulatory inefficiencies that hinder their ability to transition to advanced economic stages.

Another challenge is the shift from manufacturing-led to service-led growth, which many late convergers struggle to achieve due to weak service-sector productivity and a lack of globally competitive industries. Additionally, global economic dynamics, including trade protectionism, volatile capital flows, and shifting supply chains, can disproportionately affect late-converging nations, reducing their ability to integrate into global markets effectively.

Social and demographic factors also play a role. Rapid urbanization, rising inequality, and demographic shifts can strain social cohesion and create resistance to necessary but painful economic reforms. If policymakers fail to address these issues, the resulting instability can exacerbate the stall.

To overcome the Late Converger Stall, countries must prioritize institutional reform, invest heavily in education and innovation, and create robust