Industrialisation, Employment and Poverty

Abstract

In this paper we revisit the debate on the role of industrialisation in employment generation and poverty reduction in developing countries through an interpretative survey of the literature, supplemented with relevant stylized facts. After more than four decades of development experience and research, there is a consensus that the early emphasis on “force” import substitution through protection and state intervention has outlived its usefulness and growth prospects and poverty alleviation though employment generation are greatly enhanced by industrialization through greater integration into the international economy. The changes of policy reforms seem to hinge, however, on policy makers’ ability to craft policies by carefully taking into account structural peculiarities and policy history of individual countries while drawing on both schools of thought and the accumulated evidence of economic successes and failures in other countries.

Keywords: industrialisation, employment, poverty, Washington consensus

JEL Classification: 014, O16, 024, 025