The Capacity-Alignment Nexus data set

Despite significant global investment in education, digital infrastructure, and governance reform, approximately 700 million people remain in extreme poverty. Contemporary development models treat human capital, technology, and institutional quality as separable, additive inputs, a framework that has generated a large policy literature focused on maximising individual pillar levels while leaving their structural interrelationship largely unexamined. This paper contests that assumption with large-scale panel evidence. Drawing on a balanced panel of 161 countries observed annually from 2000 to 2023 (3,864 country-year observations) sourced from the World Bank World Development Indicators, Worldwide Governance Indicators, and the ITU ICT Development Index, we introduce the Capacity-Alignment Nexus a theoretical and empirical framework positing that the degree of structural alignment across a nation's human, technological, and institutional capacities is a first-order determinant of poverty outcomes. We operationalise this concept through an Alignment Friction measure computed as the normalised standard deviation across three composite pillar indices, and estimate its effect using a Two-Way Fixed Effects estimator supplemented by System GMM robustness checks