Economic development in a world with many countries

This paper examines economic development and growth within a model of a continuum of countries. We can show the industrialization process of less developed countries endogenously. The necessary conditions for industrialization depend on the relative position of the country in the world economy. Hence, not only the domestic conditions, but also the performances of other countries are important for industrialization. By using this result, we also consider the relation between agricultural productivity and industrialization. This relation is dependent on the situation of the world economy. If an agricultural country has high industrial productivity, high agricultural productivity may enhance industrialization, but this relation may become inverse by changing the performance of other less developed countries. Furthermore, we examine the effects of less productive industrialized countries. Those countries deter industrialization of less developed countries and development of other industrialized countries. This result is important to consider the infant industry protection policy.