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What impedes structural transformation in Asia?

Author

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  • Kunal Sen

    (UNU-WIDER, Finland)

Abstract

Structural transformation – the movement of workers from low productivity to high productivity activities – is an essential ingredient of inclusive growth. In the present paper, evidence on why the pace of structural transformation has differed widely across countries in Asia is reviewed, with a specific focus on China, India and Thailand. It is argued that government failures relating to the functioning of labour, land and product markets, and market failures relating to coordination of investment, credit market imperfections and human capital formation have been the primary causes of the slow pace of structural transformation in several Asian countries. In the paper, it is suggested that emphasis be placed on reforming policies that impede the functioning of labour, land and product markets and strengthening industrial and education policies to tackle specific market failures pertaining to investment coordination and human capital formation.

Suggested Citation

  • Kunal Sen, 2018. "What impedes structural transformation in Asia?," Asia-Pacific Sustainable Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 25(1), pages 1-35, June.
    • Handle: RePEc:unt:japsdj:v:25:y:2018:i:1:p:1-35
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    More about this item

    Keywords

    structural transformation; government failure; market failure; Asia;
    All these keywords.

    JEL classification:

    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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