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What are the similarities and differences? To no avail, I tried ODO and this Wordreference.com post.

{verb} 1[.0]. Make or become better:
1.2. [no object] (improve on/upon) Achieve or produce something better than:

Footnote: I encountered this issue while reading Principles of Microeconomics, 7 Ed, 2014, by NG Mankiw, who applies Defn 1.0 on p 11:

Governments Can Sometimes Improve Market Outcomes.

But arrestingly, on p13, Mankiw instead applies Defn 1.2:

To say that the government CAN improve on market outcomes ... does not mean that it always WILL.

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Improve: make it better. Improve upon: make something that is better than it.

P.S. Some examples:

We have improved our Comfort Ride toilet by adding a heated seat.

We have improved upon basic toilet design by using mains pressure to assist the flush, moving the same amount of waste with less water.

P.S. When we improve something, me make it incrementally better. When we add the preposition upon (improve upon something) we are casting the object of the preposition as a starting place, a basis, a status quo, the current paradigm. To "improve upon" that paradigm is to make a significant or major advance in respect to it, to "leapfrog" it. You do or make something better than it.

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    @Khan: The quotations the lexicographers cite in support of their definitions are nearly worthless as attestations: "Do you really think you can improve upon this song? No one can improve on my favorite melody." What does that mean exactly? Make the song itself better by tinkering with its melody? Make another song with a better melody than that of the first song? Dec 22 '15 at 11:38
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I agree with TRomano. To improve something is to essentially change it but keep it the same item. To improve upon something is to create an entirely new item that is better than the original item.

For instance, I could have improved TRomano's answer by editing it, but instead it chose to improve upon it by writing my own answer.

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To improve X means to make X better.

To improve on X means to take what was learned by making a previous X and make (or try to make) something new that is an evolution of X.

The electric car is an improvement on gas-powered vehicles, with respect to environmental impact.

The browser on my smartphone is a vast improvement on the one of my feature phone (We are saying the browser is so much different it's essentially a "new thing".)

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The conclusion is likely to be that we use "improve on/upon" when we want to make a method or way of doing something, or a result of something become a better one, and "improve" when we want to make better anything other than a method or a result. And to improve on/upon something is to make it better so as to transform it into a more advanced or satisfactory version of the original. Thus, we "improve upon" a method, result, score, design, performance, etc., each of which can actually be viewed as some kind of result produced by whoever is engaging in some task or activity that can produce or reach this kind of "result" when completed or done.

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