The main question raised in this paper is: What is it about Chile that has set it apart from Peru? Chile and Peru are neighboring countries. Both had very similar GDP per capita in the early 1970s but today the average Chilean is twice as rich as the average Peruvian. In 1962 Peru had a higher GDP per capita than Korea but today Koreans are twice as rich. Why has Peru failed to keep pace with other emerging economies even though it is a resource abundant country? These are some of the questions raised in this work in an attempt to show why some countries grow but others lag behind even if they continue to grow at a modest pace. The paper examines economic policies and other institutional factors and makes use of measurable indicators to show that countries might be of initial similar circumstances but some have been able to leapfrog over others.

Some of the questions being raised are: What are some of the factors that have led to a more successful model of development? What are the important differences in economic policy they have followed? Why do countries seem to be caught in primary production and unable to build its capital goods industry? How can countries build a more modern industrial structure and compete internationally? Why is it that despite posting above average rates of growth development has not blossomed? The paper tries to tackle some of these question in comparative perspective.