Technological Learning, Social Learning and Technological Change

Abstract

A central puzzle facing development economists is why it is that the growth rates and income levels of various countries have not converged faster than they have. Indeed, there is some evidence that there has been divergence for many less developed countries (LDCs), rather than convergence. Traditional neoclassical growth theory (Solow, 1956) predicts that, in the long run, the growth rates in all countries should be related only to the rate of technological progress and of population growth; growth rates in per capita incomes should be related only to the rate of labour augmenting technological progress; and differences in levels of per capita consumption should be related to differences in savings rates. Even if the LDCs adopt the best practices of the developed. countries with a lag, the rates of technological progress will be the same, and differences in levels of per capita income will then be related also to the length of the lag in the diffusion of technology.