COUNTRY CAPABILITIES AND THE PERMEABILITY OF BORDERS

The history of international competition shows long cycles in country leadership. This paper argues that these cycles can be explained by differences in country capabilities, in terms of both technologies and organizing principles, which diffuse more slowly across than within national and regional borders. The country that innovates in best practices eventually loses leadership, but not before increasing its wealth and claims on foreign assets and investments. Copyright © 1991 John Wiley & Sons, Ltd.