OECD Development Centre Working Papers
The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.
- ISSN: 18151949 (online)
- https://doi.org/10.1787/18151949
On the Role of Productivity and Factor Accumulation in Economic Development in Latin America and the Caribbean
This paper combines development and growth accounting exercises with
economic theory to estimate the relative importance of total factor productivity and the
accumulation of factors of production in the economic development performance of
Latin America. The region’s development performance is assessed in contrast with
various alternative benchmarks, both advanced countries and peer countries in other
regions. We find that total factor productivity is the predominant factor: low and slow
productivity, as opposed to impediments to factor accumulation, is the key to
understand Latin America’s low income relative to developed economies and its
stagnation relative to other developing countries that are catching up. While policies
easing factor accumulation would help improving productivity somewhat, for the most
part, closing the productivity gap requires productivity-specific policies.
Keywords: economic growth, Latin America, total factor productivity, development
JEL:
O47: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence;
O10: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Economic Development: General
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