## Make some data to show the technique
df <- data.frame(
	ccode = rep(1:5, each=25), 
	year = 1980:2004,
	x = round(rnorm(125, 0, 4))
)
# create vector of observation numbers in dataset
df$obs <- 1:nrow(df)
# create country-year variable
cy <- paste(df$ccode, df$year, sep=".")
# create country-lag-year variable
lcy <- paste(df$ccode, df$year-1, sep=".")
# define the lagged observation 
df$lagobs <- df$obs[match(lcy, cy)]

## cbind x and the one-period lag of x

cbind(df$x, df$x[df$lagobs])