Is there a diff-like algorithm that handles moving block of lines?

The diff program, in its various incarnations, is reasonably good at computing the difference between two text files and expressing it more compactly than showing both files in their entirety. It shows the difference as a sequence of inserted and deleted chunks of lines (or changed lines in some cases, but that's equivalent to a deletion followed by an insertion). The same or very similar program or algorithm is used by patch and by source control systems to minimize the storage required to represent the differences between two versions of the same file. The algorithm is discussed here and here.

But it falls down when blocks of text are moved within the file.

Suppose you have the following two files, a.txt and b.txt (imagine that they're both hundreds of lines long rather than just 6):

a.txt   b.txt
-----   -----
1       4
2       5
3       6
4       1
5       2
6       3

diff a.txt b.txt shows this:

$ diff a.txt b.txt 
1,3d0
< 1
< 2
< 3
6a4,6
> 1
> 2
> 3

The change from a.txt to b.txt can be expressed as "Take the first three lines and move them to the end", but diff shows the complete contents of the moved chunk of lines twice, missing an opportunity to describe this large change very briefly.

Note that diff -e shows the block of text only once, but that's because it doesn't show the contents of deleted lines.

Is there a variant of the diff algorithm that (a) retains diff's ability to represent insertions and deletions, and (b) efficiently represents moved blocks of text without having to show their entire contents?

Solution

Since you asked for an algorithm and not an application, take a look at "The String-to-String Correction Problem with Block Moves" by Walter Tichy. There are others, but that's the original, so you can look for papers that cite it to find more.

The paper cites Paul Heckel's paper "A technique for isolating differences between files" (mentioned in this answer to this question) and mentions this about its algorithm:

Heckel[3] pointed out similar problems with LCS techniques and proposed a linear-lime algorithm to detect block moves. The algorithm performs adequately if there are few duplicate symbols in the strings. However, the algorithm gives poor results otherwise. For example, given the two strings aabb and bbaa, Heckel's algorithm fails to discover any common substring.