Understanding the Income and Efficiency Gap in Latin America and the Caribbean

Abstract

This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

Lessons from Poland, Insights for Poland

“…Poland's ratings on governance are approximately equal to the average of the new HICs, but well below that of established HICs (Figure 3). Addressing gaps in governance matters, because the incentives of firms to innovate are positively correlated with institutional variables such as the rule of law and democracy (Nguyen and Jaramillo 2016). Cross-country evidence shows that the correlation between democracy and innovation and growth becomes more positive and significant as economies reach the technological frontier (Aghion et al 2014).…”