Productivity gains and initial productivity level: Can we explain the outliers?

We expect productivity gains to be higher in countries where the initial level of productivity is lower. Drawing a distinction between OECD and emerging countries, we seek out outliers , that is countries where the level of productivity was initially low and yet where productivity gains have also been low. These countries include: Among emerging countries, the Philippines, Nigeria, Indonesia, Morocco, Thailand and Ethiopia; Among OECD countries, Greece, Spain and Italy. What mechanism may explain why an initially low-productivity country also has low productivity gains? We examine the possible effects of: A savings and therefore investment shortfall; An underperforming education system, a low education level and low skills; Under - modernisation of the economy. We find that the best explanation for emerging countries is a savings shortfall ; and for OECD countries low skills.