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Rethinking development policy: What remains of structural transformation?

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  • Atolia, Manoj
  • Loungani, Prakash
  • Marquis, Milton
  • Papageorgiou, Chris

Abstract

This paper takes a fresh look at the current theories of structural transformation and the role of private and public fundamentals in the process. It summarizes some representative past and current experiences of various countries vis-a-vis structural transformation with a focus on the roles of manufacturing, policy, and the changing nature of global production in shaping the trajectory of structural transformation. The salient aspects of the current debate on premature deindustrialization and its relation to a middle-income trap are described as they relate to the path of structural transformation. Conclusions are drawn regarding prospective future paths for structural transformation and development policies as well as for the need for further empirical analysis to inform our current understanding of the process of economic development.

Suggested Citation

  • Atolia, Manoj & Loungani, Prakash & Marquis, Milton & Papageorgiou, Chris, 2020. "Rethinking development policy: What remains of structural transformation?," World Development, Elsevier, vol. 128(C).
    • Handle: RePEc:eee:wdevel:v:128:y:2020:i:c:s0305750x19304838
    DOI: 10.1016/j.worlddev.2019.104834
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    2. Kabinet Kaba & Justin Yifu Lin & Mary‐Françoise Renard, 2022. "Structural change and trade openness in sub‐Saharan African countries," The World Economy, Wiley Blackwell, vol. 45(7), pages 2101-2134, July.
    3. Çakır, Muhammet Sait & Aydemir, Resul, 2022. "A Dutch disease approach into the premature deindustrialization," Economic Systems, Elsevier, vol. 46(4).
    4. Sena Kimm Gnangnon, 2022. "Effect of Structural Economic Vulnerability on the Participation in International Trade," JRFM, MDPI, vol. 15(9), pages 1-36, September.
    5. Tévécia Ronzon & Susanne Iost & George Philippidis, 2022. "Has the European Union entered a bioeconomy transition? Combining an output-based approach with a shift-share analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(6), pages 8195-8217, June.
    6. Lautier, Marc, 2024. "Manufacturing still matters for developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 168-177.
    7. Vestby, Jonas & Buhaug, Halvard & von Uexkull, Nina, 2021. "Why do some poor countries see armed conflict while others do not? A dual sector approach," World Development, Elsevier, vol. 138(C).
    8. Alexandre, Fernando & Bação, Pedro & Veiga, Francisco José, 2022. "The political economy of productivity growth," European Journal of Political Economy, Elsevier, vol. 75(C).

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    More about this item

    Keywords

    Development policies; Structural transformation; Premature deindustrialization; Middle-income trap; Push and pull factors; Growth diagnostics; Africa; Ghana; Viet Nam;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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