As the level of development rises and the structure of the economy changes, the growth rate of factor inputs will slow down relatively, and their contribution to economic growth will naturally decrease accordingly. Sustained economic growth thus relies more on the continuous improvement of productivity—specifically, the continuous enhancement of the efficiency in the use of production factors such as capital, land, and human resources, with total factor productivity (TFP) requiring constant elevation in particular. To a certain extent, the process of economic catch-up for low-income countries is characterized by technological catch-up with frontier countries and the narrowing of absolute productivity gaps. Within the framework of the A-C theory, what trajectory and structural characteristics does a country show in productivity catch-up during the transition from poverty to prosperity? What is the relationship between this catch-up process and political governance as well as economic institutions? This is precisely the question that this chapter aims to answer.