A note on unproductive activities

Innovation in Latin America is not producing economic growth. Somewhere, the channel that goes from innovation to increased productivity and then to more economic growth, is breaking down. The statistics on this are telling. Total Factor Productivity measures how efficiently an economy uses its inputs for production. Between 2000 and 2016, the region has been one of the worst global performers on this indicator. At the same time, economic growth in the region over the past 15 years increased at a sluggish 2.7 percent per year. There are several explanations for this colossal problem. The pervasive existence of Directly Unproductive Profit-seeking Activities is one of them. Economist Jagdish Bhagwati coined the term Directly Unproductive Profit-seeking Activities, or Dup, to name […]