Structural Change, Fundamentals, and Growth: A Framework and Case Studies

41 Pages Posted: 27 Apr 2017

See all articles by Margaret McMillan

Margaret McMillan

Tufts University - Department of Economics; International Food Policy Research Institute (IFPRI); National Bureau of Economic Research (NBER)

Dani Rodrik

Harvard University - Harvard Kennedy School (HKS); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Claudia Sepulveda

World Bank

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Date Written: April 26, 2017

Abstract

Developing countries made considerable gains during the first decade of the 21st century. Their economies grew at unprecedented rates, resulting in large reduction in extreme poverty and a significant expansion of the middle class. But more recently that progress has slowed with an economic environment of lackluster global trade, not enough jobs coupled with skills mismatches, continued globalization and technological change, greater income inequality, unprecedented population aging in richer countries, and youth bulges in the poorer ones. This essay examines how seven key countries fared from 1990-2010 in their development quest. The sample includes Brazil, India, Vietnam and four African countries -- Botswana, Ghana, Nigeria, and Zambia -- all of which experienced rapid growth in recent years, but for different reasons. The patterns of growth are analyzed in each of these countries using a unifying framework that draws a distinction between the "structural transformation" and "fundamentals" challenges in growth. Out of the seven countries, the traditional path to rapid growth of export oriented industrialization only played a significant role in Vietnam.

Keywords: Economic Growth, Economic Theory & Research, Rural Labor Markets, Industrial Economics

Suggested Citation

McMillan, Margaret and Rodrik, Dani and Sepulveda, Claudia, Structural Change, Fundamentals, and Growth: A Framework and Case Studies (April 26, 2017). World Bank Policy Research Working Paper No. 8041. Available at SSRN: https://ssrn.com/abstract=2959091

Margaret McMillan (Contact Author)

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Dani Rodrik

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-9454 (Phone)
617-496-5747 (Fax)

HOME PAGE: http://www.ksg.harvard.edu/rodrik/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Claudia Sepulveda

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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