Convergence and Divergence Between Developing and Developed States

The last decades only a limited number (less than 10 percent of the economies in the world) managing to progress out of lower or middle income status to high-income status but despite the rising weight of middle-income countries in supporting global growth, many of them have been stuck in the middle-income trap. Leader-follower strategy is based on imitation and emulation the leading countries have paid to explain this convergence and catching up process and analyze its nature and determinants so that provide opportunities for other developing countries to following from generations and waves of development. Leading-follower strategy can be explained in three models within the country includes the catching-up process through diversification and rationalization of industries, pro-trade-oriented (PROT) foreign direct investment (FDI) and agreed specialization. Intra-regional dynamics contains regional industrialization waves and intra-regional trade and investment. We concluded the most important principles of the strategy are structural transformation; correct selecting of leader countries and imitation of followers from leaders Countries; The comparative advantage and export promotion policies according to it. Also it should be avoided from economics of unrealistic ambitions and comparative-advantage-defying strategies in these processes. So in some cases, countries do not move in the direction of structural changes but in some cases, countries move in the direction of structural changes but these changes is not consistent with the comparative advantages of the country and the structure of production factors