The world’s technology, for the most part, is available to less developed, lower income countries. So why don’t they just reach out, grab it, and catch up? Well, a few have, particularly the so-called “Asian tigers”. Others have caught up on life expectancy and education, but not on income. This article by Ricardo Hausmann suggests a few reasons why it is not so easy.

• Restrictions on trade, competition, and/or property rights. (But the point of this article is that these are the traditional answers economists give, and they are not the only reasons.)
• University scientists are more interested in teaching, basic research, and scientific publications than in applied research that could help profit-seeking commercial firms.
• Businesses do not invest much in R&D, either internally or with university partners.

He uses patent filings as a proxy for technological innovation, and I am not so sure about that. For one thing, he makes this statement:

Countries like Austria, Germany, Denmark, France, Great Britain, Norway, New Zealand, and Singapore patent at a rate at least one-quarter that of the US. And other countries, such as Australia, Canada, Switzerland, Iran, Israel, Italy, the Netherlands, Poland, and Slovenia, come in at just above one-seventh the US rate.

Project Syndicate

The countries in the list above are doing quite well I believe compared to the U.S., and I know some of them have per-capita incomes greater than the U.S. Certainly, our per-capita U.S. GDP is not 7 times Norway’s and 4 times Singapore’s! (It’s lower in both cases per the CIA world fact book.)

Also, being healthy and well educated in a middle income country might not be all that terrible a life.

Those are my criticisms. But I do sometimes fantasize about how I would jump-start progress in a developing country. Certainly, I want to believe that big investments in research and education would pay off in the long term. Building universities, attracting talented professors, and then connecting them to private sector needs would seem to be important. I would want to bring in direct investment from private firms with high-tech know-how, and also seek expertise from development agencies like the World Bank, USAID and its equivalents in other countries. In all these cases though, you have to drive a hard bargain or you are likely to be exploited. I might hire Norway or Singapore to help me do that. Get the economy moving, then use the proceeds to build the infrastructure and keep the education and R&D thing going. At some point, you have to invest in health care, environmental protection, and labor standards if you want to provide a decent quality of life for people. I would probably follow Costa Rica’s lead and not bother with much of an army, but then I would probably be invaded by my neighbors or murdered by my own body guards.