• James H. Anderson,

    1. Anderson: Economist, World Bank, 1818 H Street NW, Washington, DC 20433. E-mail
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  • Roger R. Betancourt

    1. Betancourt: Professor, Department of Economics, University of Maryland, College Park, MD 20742. E-mail
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      We are grateful to the world Bank socioeconomic Data Division for providing the Syrquin and Chenery Data. Earlier versions of the article were presented at the meetings of the Western Economic Association in San Diego, NEUDC, the University of Alberta, and Gerge Washington University. We thank R. Driskill, p. Messinger, J. Nugent, A. panagariya, C. Snyder, S. Jain, and an Anonymous referee for their comments while claiming responsinbility for any errors. All correspondence should be addressed to Betancourt. This article has benefited from support provided by the U.S. Agency for International Development under Cooperative Agreement no. DHR-0015-0031-00 to the Center on Institutional by the Office of Economic and Institutional Reform, Center for Economic Growth, Bureau for Global Programs, Field Support and Research.


Using an increasing returns specification for distribution, an inverted U pattern between the share of distribution in gross domestic product and the level of development is shown to arise. A cross-section time-series data set is constructed and merged with one used to analyze the service sector. In contrast to the rising pattern found for services, an average time-series relation that exhibits an inverted U pattern is established. The empirical results are robust, for example, to choice of functional form and country and time period coverage. A similar pattern is found in the average cross-section (country) relation between distribution and development.