ABSTRACT
In this chapter, P. T. Bauer takes a critical look at a version of the “Matthew effect” discussed by Jackman in Chapter 18. In the 1950s and 1960s, it was a frequently stated proposition among those concerned with development that there exists a “vicious circle of poverty” in which poverty breeds further poverty, making it impossible for poor nations to break out of the circle. Bauer disputes this perspective on both logical and empirical grounds, arguing that the widening international gap between rich and poor has been exaggerated because, among other things, it is based upon international exchange rates rather than on a comparison of domestic purchasing power. Bauer goes on to consider the impact of population growth on development.
