When did today’s vast economic inequalities between rich and poor nations emerge? The “Great Divergence” debate has occupied economic historians for decades. Based on the latest Maddison Project Database, our charts visualize this pivotal economic shift across major world regions since 1820.
Kenneth Pomeranz’s influential book “The Great Divergence” (2000) challenged conventional wisdom by arguing that parts of Asia, particularly China’s Yangtze Delta, were on comparable economic footing with Europe until around 1800. According to Pomeranz, Europe’s subsequent surge ahead wasn’t inevitable but stemmed from fortunate access to coal and colonial resources.
Oded Galor’s “The Journey of Humanity” offers a more comprehensive explanation through his “unified growth theory.” This framework explains how regions escaped the Malthusian trap—where population growth historically consumed productivity gains, keeping living standards stagnant. For millennia, whenever incomes rose, so did population, pushing per capita standards back toward subsistence levels, just as Thomas Malthus predicted.
The breakthrough came when societies began investing in human capital rather than family size, triggering the demographic transition. Our twin charts illustrate this process, showing how Western regions first experienced rising GDP per capita while later moderating population growth—breaking the Malthusian cycle. Regions that industrialized later often remained in a development trap, with continued high fertility diluting economic gains.
The Maddison Project Database, established by economic historian Angus Maddison and continuously updated, provides the empirical foundation for testing these competing theories. Though partial economic convergence has occurred in recent decades, particularly in parts of Asia, the patterns of divergence established in the 19th century continue to shape global inequality today.
The complete code for this analysis is available on our GitHub repository