Introduction

A remarkable feature of the world economic scene is the great variation in income levels among countries, ranging from a per capita income of less than US$200 in the least developed countries of Asia and Africa to over US$15 000 in the United States and some of the richer countries of Europe and the Middle East. Of course, countries differ so much in their location, populations, endowments of productive resources, cultural backgrounds, economic institutions and political circumstances, especially their commitment to economic development, that some differences in the per capita incomes are only to be expected. On the other hand, most countries have had close contact with each other for the greater part of the past two centuries, so that they have increasingly had access to the same body of productive technology; it may therefore have been expected that this contact would have led to some reduction in the differences in their per capita incomes. In view of this historical circumstance, it is remarkable that the differences between countries are still so great.