Rethinking Development Policy: Deindustrialization, Servicification and Structural Transformation

Abstract

This paper takes a fresh look at the current theories of structural transformation and the role ofprivate and public fundamentals in the process. It summarizes some representative past andcurrent experiences of various countries vis-a-vis structural transformation with a focus on theroles of manufacturing, policy, and the international environment in shaping the trajectory ofstructural transformation. The salient aspects of the current debate on prematuredeindustrialization and its relation to a middle-income trap are described as they relate to thepath of structural transformation. Conclusions are drawn regarding prospective future paths forstructural transformation and development policies.

Keywords: Africa, Development policies, structural transformation, premature deindustrialization, middle-income trap, push factors, growth diagnostics, Macroeconomic Analyses of Economic Development, General, Institutions and Growth

JEL Classification: O11, O20, O43, O50, O55