Final answer:
The catch-up effect suggests that developing countries can grow faster than developed ones by adopting existing technologies, which is known as "the advantages of backwardness." However, convergence is slow, and decades of growth differences can create large disparities in standards of living.
Step-by-step explanation:
The catch-up effect refers to the theory that developing countries have the potential to grow at a faster rate compared to developed countries and thus catch up in terms of income levels and living standards. This theory is partly grounded on the phenomenon that it is relatively easier for poorer nations to improve their productivity by adopting existing technologies from richer nations, rather than having to innovate new technologies themselves. This phenomenon was termed "the advantages of backwardness" by the economist Alexander Gerschenkron. However, as these developing countries catch up, their growth may slow down because the advantages of catching up diminish.
Despite the potential for catching up, the process is slow, and small differences in annual growth rates can lead to significant disparities over time. High-income countries have built up their advantages over many decades, and it can take decades for low-income countries to make substantial progress towards catching up. Gerschenkron emphasized that while being "backward" can provide the impetus to catch up, it is not desirable in itself but rather a starting point for development.