This paper argues that a significant part of measured TFP differences across countries is attributable not to technological factors that affect the entire economy neutrally, but rather, to variations in the structural composition of economies. In particular, the allocation of scarce inputs...

This paper provides a framework which decomposes aggregate TFP into a component reflecting relative efficiency across sectors, and another component which reflects the absolute level of efficiency. A development accounting analysis suggests that as much as 85 percent of the international...