United Nations Industrial Development Organization
Vienna International Centre
P.O. Box 300
NBER Working Papers and Publications
|October 2007||Why Development Levels Differ: The Sources of Differential Economic Growth in a Panel of High and Low Income Countries|
with Charles R. Hulten: w13469
Average income per capita in the countries of the OECD was more than 20 times larger in 2000 than that of the poorest countries of sub-Sahara Africa and elsewhere, and many of the latter are not only falling behind the world leaders, but have even regressed in recent years. At the same time, other low-income countries have shown the capacity to make dramatic improvements in income per capita. Two general explanations have been offered to account for the observed patterns of growth. One view stresses differences in the efficiency of production are the main source of the observed gap in output per worker. A competing explanation reverses this conclusion and gives primary importance to capital formation. We examine the relative importance of these two factors as an explanation of the gap ...