Which sectors make the poor countries so unproductive?

Which sectors are mostly responsible for the low TFPs of developing coun- ? To answer this question we develop a new framework for sectoral accounting. Applying this framework to the Penn World Table, we find that in equipment, construction, and food the sectoral TFP between developing countries and the United States are much than in the aggregate. In contrast, in manufactured consumption the TFP differences are about equal to the aggregate TFP differences in services they are much smaller. We show that our level of disaggregation allows us to reconcile the results of existing studies of sectoral productivity differences, which have focused on non{comparable two{sector of the aggregate data. We also show that our results help shed light on existing theories of aggregate TFP differences.