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1 Introduction 1
2 International Income Facts 11
Evolution of Income Levels and Differences 13
Summary of Facts 23
Some Questions and Features of Candidate
Theory 24
Appendix: Large Rapid Development Experiences 25
3 Growth Theory with No TFP Differences 35
The Standard Model 36
The Two-Sector Extension 43
The Intangible Capital Extension 44
4 Growth Theory with a Human Capital Sector 57
Human Capital Sector Model Extension 58
Direct Evidence of Human Capital's Role 62
5 Growth Theory with TFP Differences 67
The Model 71
Model Calibration 75
Findings 77
Steady-State Output and TFP Differences 79
6 Constraints on Firm Technologies and TFP 81
The Plant Technology and the Barrier 82
From the Plant Technology to the Aggregate
Production Function 86
The Mapping from Barriers to TFP 88
7 Evidence of Barriers to Ef?ciency 91
The Textile Industry 92
Subsurface Mining in the United States 97
Relative Industry Productivities across Countries 100
8 Monopoly Rights: A Theory of TFP Differences 103
The Economy 105
The Monopoly Rights Arrangement 107
The Free Enterprise Arrangement 121
Quantitative Findings 122
Compensatory Schemes 127
9 Conclusion 133
Why England before Continental Europe 134
Why Not Earlier in China 135
Why the United States and Switzerland Did So
Well 138
Why Japan Experienced Its Development Miracle 140
Development Policy: Competition, Free Trade, and
Privatization 141
Final Comment 144
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