We examine the record of cross-country growth over the past fifty years and ask if developing countries have made progress on closing the income gap between their per capita incomes and those in the advanced economies. We conclude that, as a group, they have not and then survey the literature on absolute convergence with particular emphasis on that from the last decade or so. That literature supports our conclusion of a lack of progress in closing the income gap between countries. We close with a brief examination of the recent literature on cross-individual distribution of income, which finds that despite the lack of progress on cross country convergence, global inequality has tended to fall since 2000.

Résumé. Les auteurs s'intéressent ici à la nature des représentations cognitives qu'utilisent les vérificateurs en situation de fraude potentielle dans les états financiers. Ils divisent le problème de détection de la fraude en deux parties: la détection de la mise en scène élaborée par la direction pour masquer la fraude et la détection de la fraude. Ils examinent les deux méthodes de détection des mises en scène proposées par Kahneman et Tversky (1986): 1) l'utilisation de représentations multiples aboutissant à différentes interprétations possibles des données contenues dans les états financiers; et 2) l'utilisation d'une méthode permettant de transposer les données contenues dans les états financiers sous forme de représentation normalisée. Vingt‐quatre associés de vérification ont participé à l'étude. Chacun d'eux devait procéder à la contre‐révision d'un dossier de vérification. Tous les vérificateurs examinaient quatre cas dans lesquels la direction avait présenté une image trompeuse de l'entreprise (au moyen d'une mise en scène) et produit des états financiers frauduleux. Les résultats obtenus par les auteurs confirment la thèse de Kahneman et Tversky selon laquelle les mises en scène peuvent être décelées grâce à la transposition du problème sous forme de représentation normalisée. Les vérificateurs qui ont eu recours à une représentation normalisée sont parvenus à percer à jour la mise en scène de la direction, à totaliser les éléments correctement et à déceler la fraude dans tous les cas. Ils ont, pour cela, appliqué des procédés conformes aux normes de vérification généralement reconnues (Institut Canadien des Comptables Agréés, 1988; American Institute of Certified Public Accountants, 1984) pour totaliser les éléments. Les vérificateurs qui ont eu recours à des représentations multiples ont aussi détecté la mise en scène élaborée par la direction dans les quatre cas. Ils n'ont cependant pas appliqué les procédés de totalisation recommandés dans les normes de vérification et ne sont parvenus à détecter la fraude dans aucun des quatre cas.

In this study, we address the question of what kinds of cognitive representations auditors use in a situation of potential financial statement fraud. We divide the problem of detecting fraud into two parts: detecting the frame management has constructed to mask the fraud, and detecting the fraud. We examine two ways proposed by Kahneman and Tversky (1986) for detecting a frame: (1) use of multiple representations that provide alternative interpretations of data in the financial statements; and (2) use of a procedure that transforms financial statement data into a standard representation. Twenty‐four audit partners served as participants in the study. Each partner conducted a simulation of a concurring partner review. All auditors reviewed four cases in which management had created a misleading description of the company (a frame) and a financial statement fraud. The results support Kahneman and Tversky's proposal that frames can be detected by transforming a problem into a standard representation. Auditors who used a standard representation successfully detected management's frame, aggregated the items, and detected fraud in all four cases. Auditors who used a standard representation followed a procedure specified by generally accepted auditing standards (Canadian Institute of Chartered Accountants 1988, American Institute of Certified Public Accountants 1984) for aggregating items. Auditors who used multiple representations detected management's frame on all four cases. These auditors, however, did not use the aggregation procedure specified by auditing standards and failed to detect the fraud on all four cases.

Unlike most other European countries the United Kingdom's pension system is not well described by an analysis of the social-security element. For 30 years or more, around half the workforce has been covered by private occupational pensions. Something like half of the income of pensioners comes from non-socialsecurity sources, and this proportion is growing. Of the workforce in the mid-1990's, 75 percent are contracted out of the secondtier State Earnings Related Pension Scheme (SERPS) into private occupational or personal pensions.' Partly as a result of these facts the United Kingdom also differs from many other countries in one other important respect: its state pension system is solvent. Tax rates necessary to pay for it are not predicted to rise despite the fact that the number of people over state retirement age is predicted to rise from 15.7 percent of the whole population to over 24 percent in 2050.2 In this paper we begin by describing the labor-market behavior of individuals around pension age. We also consider the coverage of the various parts of the social-security system. We go on to explain the structure of state pensions in the United Kingdom and compute the incentives for retirement that the structure creates, focusing on early retirement and the role of disability benefits, which are especially relevant for lower-skilled workers. We compare these incentives with those facing workers with private occupational schemes who now make up the mnajority of older workers close to retirement. The structure of incentives is found to match well with the observed patterns of labor-market participation in the data. L. The Labor-Market Behavior of Older Persons in the United Kingdom The labor-market behavior of older persons in the United Kingdom has been characterized by a severe fall in the participation of men. The rate of participation among recent cohorts falls sharply below 80 percent after the age of 50 and declines rapidly thereafter. In contrast the secular rise in the participation of women has resulted in a small upward trend in participation among women in the 55-60 age bracket, with participation rates approaching those for men