World-Class Research. Where Theory Becomes Policy

Section 1

Work the Academy itself makes, with the World Bank and with the researchers it brings together. Published first, then the projects on the way.

Working paper

2025

Country case studies · Firm dynamics

Engineering Ukraine's Wirtschaftswunder

Ufuk Akcigit, Furkan Kilic, Somik Lall, Solomiya Shpak. NBER Working Paper 34103, 2025.

Twenty-five years of firm-level data from Ukraine show why a competitive economy hollowed out long before the war. Top four manufacturing firms grew from 49 to 53 percent of market share. Productivity growth collapsed from 15.2 percent annually (2002 to 2013) to 3.7 percent (2014 to 2019). New firms attempting transformative products are absorbed by incumbents on a ten-month average. Industries receiving offshore-financial-center investment show 27 percent lower entry rates.

Reconstruction spending without structural reform will rebuild the same captured economy. Ukraine's Wirtschaftswunder requires institutional remedies, not balance sheets.

• Read on NBER →
• Academy summary →
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WDR contribution

2024

Country case studies · Innovation policy

World Development Report 2024: The Middle-Income Trap

World Bank. World Bank Group, 2024.

The Bank's clearest articulation of why the climb from middle-income to high-income status gets harder for most countries. Introduces the 3i framework: investment, infusion, innovation. The book that the Growth Academy was built around.

Middle-income countries cannot grow by doing more of what worked at low income. They need to switch from accumulation to absorption to innovation, in sequence.

• Read on World Bank →
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Forthcoming work

Projects the Academy has under way. The abstract is here; the draft follows.

Working paper

2026

Country case studies · Firm dynamics

Measuring Productivity, Business Dynamism, and Economic Growth: The Case of Colombia and Türkiye

Ufuk Akcigit, Maria Aristizabal-Ramirez, Seyit Cilasun, Furkan Kilic, Christian Posso, Andres Zambrano. Growth Academy working paper, 2026.

Productivity drives long-run growth, but measuring it inside a firm is hard. True productivity needs data on both prices and quantities, which developing countries rarely have, so empirical work falls back on revenue. Because revenue is price times quantity, that measure cannot tell a genuinely productive firm apart from one that simply charges more. This project builds a second measure from social-security records, which capture what an employer pays its workers above and beyond who those workers are. The two measures move in opposite directions with market power, so read together they separate productivity from pricing. Colombia and Türkiye are the test cases: both have the matched employer-employee records the method needs, and both also have firm-level prices, which makes it possible to check the method against directly estimated productivity before extending it to countries where no such check exists.

Governments pick firms for credit lines, training subsidies and export support using a measure that cannot separate productivity from market power. Pairing it with a wage-based measure is what closes that gap.

Draft forthcoming

Case study

2026

Country case studies · Firm dynamics

Inclusion Through Economic Growth in South Africa

Growth Academy. Country diagnostic, 2026.

After apartheid, South Africa assembled most of what long-run growth is supposed to require: macroeconomic stability, rising educational attainment, capital accumulation, credible institutions. Growth did not follow. Poland, at a similar income level in the mid-1990s, converged toward advanced-economy living standards while South Africa moved sideways for close to three decades. This diagnostic argues the binding constraint is neither redistribution nor spatial fragmentation but business dynamism. Productive firms struggle to scale, productivity gains fail to spread, and opportunity stays concentrated. Entry and exit rates are reasonably healthy; what is missing is growth after entry. The reframing it proposes runs the familiar phrase backwards, from growth through inclusion to inclusion through growth.

Policies aimed straight at inclusion will underdeliver while the source of productive employment, firm growth, stays blocked. Sequence the reforms that let firms scale ahead of the ones that move people closer to jobs.

Draft forthcoming

Working paper

2026

Industrial policy · Innovation policy

The Evolution of China's Electric Vehicle Industry

Growth Academy. Working paper, 2026.

China went from latecomer in automobiles to the largest force in electric vehicles, and this project argues it did so through sequence rather than through any single intervention. It reads two decades of policy as three stages. Capability came first: public research, requirements on state-owned firms, and joint ventures that built domestic technical depth in batteries and motors. Consumption came second: procurement, purchase subsidies and charging infrastructure created a home market large enough for firms to scale and drive costs down. Competition came last: subsidies were withdrawn and foreign entrants were let in. A structural model of directed innovation and firm dynamics is used to ask what each stage contributed, and what the alternative orderings would have produced.

Demand subsidies do little for countries whose firms cannot yet answer them, and protection that never ends removes the pressure that made those firms good. Order and exit matter as much as the instruments.

Draft forthcoming

Working paper

2026

Firm dynamics · Country case studies

Financing Ukrainian Growth

Growth Academy. Working paper, with the National Bank of Ukraine, 2026.

Firms need two things to grow: a reason to invest and the means to do it. The Academy's Ukraine diagnostic covered the first and found that institutional capture erodes the return on innovation. This project takes on the second. Firms in developing economies generate little internal cash, so banks decide which of them can act on their prospects. The project develops a theory of productivity growth under financial constraints, in which banks price each loan to a firm's default risk and bankruptcies push capital and labor toward firms with stronger potential, and then takes the firm-level patterns that theory calls for to administrative loan-level data. The work is carried out with the National Bank of Ukraine.

Institutional reform and financial reform fail independently of each other. An economy can repair the incentive to invest and still grow slowly, if credit keeps reaching the wrong firms.

Draft forthcoming

Working paper

2026

AI · Innovation policy

BReady4AI: A Diagnostic of AI Readiness Across Countries

Growth Academy. Index, in development, 2026.

An index built to tell a country where it stands in the global AI race, what it is missing, and what would have to change for AI to be adopted. Countries are scored on three pillars: who is building and advancing AI, whose research shapes the field, and how connected and adaptable a country's AI talent base is. The indicators are constructed with network science and machine learning over large-scale bibliometric and patent data covering 2000 to 2024. A fourth pillar, on adoption and deployment, is under construction. One early result crosses what national AI strategies pay attention to against what firms in those countries report: in several developing economies the strategies concentrate on computing capacity, while the firms report that electricity and connectivity are what stop AI workloads from running at all.

For many developing countries the binding constraint on AI is not access to chips but reliable power and connectivity for firms, and a strategy that skips those layers will not turn into measurable adoption.

Draft forthcoming

Section 2

Where the authors explain the research in plain language, for readers who want the argument without the equations.

• World Bank Blogs

  September 2024

  From shadows to sunrise: How to overcome the middle-income trap

  Ufuk Akcigit, Somik Lall

  The short read of the 2024 World Development Report: why the climb out of middle income stalls, and how the investment, infusion, innovation sequence restarts it.

• World Bank Blogs

  August 2025

  Ukraine's Economy Needs to Make Room for Newer, More Productive Firms

  Somik Lall, Ufuk Akcigit

  The plain-language version of Engineering Ukraine's Wirtschaftswunder: recovery depends on letting productive newcomers grow, not on shielding the incumbents that captured the old economy.

• IMF Finance & Development

  September 2024

  The Innovation Paradox

  Ufuk Akcigit

  Why four decades of rising U.S. research spending bought slower innovation, as a few dominant firms crowded out the smaller entrants that create it.

• Liberty Street Economics, Federal Reserve Bank of New York

  January 2026

  Which Entrepreneurs Boost Productivity?

  Ufuk Akcigit, Harun Alp, Jeremy Pearce, Marta Prato

  Only a small set of entrepreneurs, the ones who hire researchers, drive most productivity growth, and schooling is what supplies them.

• World Bank Blogs

  January 2026

  The high cost of misallocating the talent of women

  Pinelopi Goldberg, Charles Gottlieb, Somik Lall, Meet Mehta, Michael Peters, Aishwarya Lakshmi Ratan

  Introduces a Global Gender Distortions Index and estimates that removing the barriers women face in labor markets could raise national output by 15 to 20 percent, with most of the lost output traced to employer-side discrimination.

• World Bank Blogs

  August 2024

  What middle-income countries can learn from America's innovation system

  Ufuk Akcigit, Somik Lall

  Three lessons from the US innovation system: innovation is now led by large established firms, talent must be developed broadly including through diaspora networks, and markets for diffusing technology matter as much as inventing it.

• World Bank Blogs

  August 2024

  Social (im)mobility: Why middle-income countries are stuck in the slow lane

  Somik Lall, Forhad Shilpi

  Argues that middle-income countries stall because opportunity is allocated by connections rather than ability, so talent goes undeveloped and social mobility stays low.

• World Bank Blogs

  January 2024

  Subways connect people with opportunity, and they slash carbon emissions in half

  Somik Lall, Susmita Dasgupta, David Wheeler

  Cities with subway systems show about 50 percent lower carbon emissions, and counting those climate benefits alongside shorter commutes makes subway investment viable in hundreds of developing-world cities.

Section 3

The papers the Academy teaches from. Every session in the curriculum traces back to work on this list.

Featured paper

2023

Firm dynamics · Creative destruction

What Happened to U.S. Business Dynamism?

Ufuk Akcigit, Sina T. Ates. Journal of Political Economy, 2023.

The textbook account of why the U.S. economy's startup rate fell, why the largest incumbents grew larger, and why aggregate productivity growth slowed. The paper builds and estimates a structural model that nests ten stylized facts about the American firm distribution.

The decline in U.S. dynamism is not a mystery. It is a measurable consequence of falling knowledge diffusion and rising barriers to imitation. Both are policy levers.

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Featured paper

2018

Creative destruction · Firm dynamics

Innovation, Reallocation and Growth

Daron Acemoglu, Ufuk Akcigit, Harun Alp, Nicholas Bloom, William Kerr. American Economic Review, 2018.

The canonical structural model of an economy where heterogeneous firms innovate, enter, exit, and reallocate. Used as the workhorse for evaluating R&D subsidies, entry subsidies, and incumbent taxation across a range of policy counterfactuals.

Subsidizing R&D for incumbents helps the wrong firms. Entry subsidies and the credible threat of exit do more for aggregate growth.

• Read on publisher →

Featured paper

2025

Talent · Innovation policy

Tapping into Talent: Coupling Education and Innovation Policies

Ufuk Akcigit, Jeremy G. Pearce, Marta Prato. Review of Economic Studies, 2025.

Why a country cannot make great inventors without making the right kind of education investment. The paper estimates how much of the inventor distribution is missing because of underinvestment in the long tail of basic schooling, and what it costs at the frontier.

R&D subsidies aimed at the top of the talent distribution leave most of the prize on the table. The marginal inventor lives in the tail, and the tail is built in primary school.

• Read on publisher →

Featured paper

2020

Country case studies · Firm dynamics

Facts on Business Dynamism in Turkey

Ufuk Akcigit, Yusuf Emre Akgunduz, Seyit Mümin Cilasun, Elif Özcan-Tok, Fatih Yilmaz. European Economic Review, 2020.

Why Turkish firms stopped growing, told in declining startup rates and the rising market share of incumbents. The paper assembles a near-universal panel of Turkish firms and documents a pattern that mirrors the American slowdown a decade later.

Turkey's productivity slowdown was visible in firm-level data five years before it was visible in macro aggregates. The diagnostic was available; the response was not.

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• Read the case study →

Featured paper

2021

Firm dynamics · Country case studies

Lack of Selection and Limits to Delegation: Firm Dynamics in Developing Countries

Ufuk Akcigit, Harun Alp, Michael Peters. American Economic Review, 2021.

A model that explains why firms in poorer countries do not grow. The mechanism is delegation: when an entrepreneur cannot trust a hired manager, the firm is capped at the size the founder can personally oversee. The paper estimates the cost of that ceiling at the macro level.

The size distribution of firms in poor countries is not a technology problem. It is an institutional one: contract enforcement, accounting standards, and managerial labor markets.

• Read on publisher →

Featured paper

2021

Firm dynamics · Creative destruction

Ten Facts on Declining Business Dynamism

Ufuk Akcigit, Sina T. Ates. AEJ: Macroeconomics, 2021.

The empirical baseline. Ten facts that any theory of the U.S. slowdown must match: declining startup rates, rising market concentration, slowing productivity, falling labor reallocation, and others. The paper any successor cites first.

If the model does not reproduce these ten patterns, it is not modeling the right economy.

• Read on publisher →

Section 4

Work by Growth Academy researchers and faculty, published through their own institutions.