Discussion Paper Details
Please find the details for DP13351 in an easy to copy and paste format below:
Title: Structural Transformation to Manufacturing and Services: What Role for Trade?
Author(s): Kym Anderson
Publication Date: December 2018
Keyword(s): comparative advantage, declining sectors, patterns of structural change and Productivity Growth
Programme Area(s): Development Economics and International Trade and Regional Economics
Abstract: Understanding how and why economies structurally transform as they grow is crucial for sound national policy making. Typically analysts of this issue focus on sectoral shares of GDP and employment. This paper extends that to include exports, including of services. It also considers mining in addition to agriculture and manufacturing, and recognizes some of the products of those four sectors are nontradable. The theory section's general equilibrium model provides hypotheses about structural change in different types of economies as they grow, and tests them econometrically with annual data for a sample of 117 countries for the period 1991-2014. The results point to the futility of adopting protective policies aimed at slowing de-agriculturalization and subsequent de-industrialization in terms of sectoral shares, since those trends inevitably will accompany economic growth. Fortuitously governments now have far more efficient and equitable ways of supporting the adjustments needed by people choosing or being pushed to leave declining industries.
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Anderson, K. 2018. 'Structural Transformation to Manufacturing and Services: What Role for Trade?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13351