NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Productivity of Nations

Robert E. Hall, Charles I. Jones

NBER Working Paper No. 5812
Issued in November 1996
NBER Program(s):   EFG   PR

Output per worker varies enormously across countries. Why? Our analysis shows that differences in governmental, cultural, and natural infrastructure are important sources of this variation. According to our results, a high-productivity country (i) has institutions that favor production over diversion, (ii) is open to international trade, (iii) has at least some private ownership, (iv) speaks an international language, and (v) is located in a temperate latitude far from the equator. A favorable infrastructure helps a country both by stimulating the accumulation of human and physical capital and by raising its total factor productivity.

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