Sectoral Productivity Gaps and Aggregate Productivity
This paper examines the role of changes in sectoral productivity gaps over time in accounting for growth realized by countries over the past few decades. To quantify the productivity impact of the sectoral gaps, a simple model of resource allocatio...
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| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/06/26538638/sectoral-productivity-gaps-aggregate-productivity http://hdl.handle.net/10986/24654 |
| Summary: | This paper examines the role of changes
in sectoral productivity gaps over time in accounting for
growth realized by countries over the past few decades. To
quantify the productivity impact of the sectoral gaps, a
simple model of resource allocation is developed in which
the gaps arise due to distortions in the form of
asymmetrical taxes across sectors. The paper finds a limited
role of changes in distortions over time in accounting for
actual growth. Implied growth from changes in distortions
accounts for less than 2.5 percent of actual growth for the
median country. To check if the lower contribution of
changes in distortions is because of unrealized gains
suggested by high levels of present distortions,
productivity gains are estimated when distortions across
countries are reduced to the US levels. Barring a couple of
cases, the gains in aggregate productivity are modest across
the sample of countries. |
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