It has long been recognized that an improved standard of living results from advances in technology, not from the accumulation of capital. It has also become clear that what truly separates developed from less-developed countries is not just a gap in resources or output but a gap in knowledge....

How can policymakers effectively reduce poverty? Most mainstream economists advocate promoting economic growth, on the grounds that it generally reduces poverty while bringing other economic benefits. However, this dominant hypothesis offers few alternatives for economies that are unable to...