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The Determinants of Structural Transformation in Asia: A Review of the Literature

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  • Sen, Kunal

    (University of Manchester)

Abstract

Structural transformation—the movement of workers from low-productivity to high-productivity activities—is an essential ingredient of inclusive growth. This paper reviews the evidence on why the pace of structural transformation has differed widely across countries in Asia, with a specific focus on the People’s Republic of China, India, and Thailand. It argues that both government failures relating to the functioning of labor, 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. The paper suggests that a specific focus is needed to reform policies that impede the functioning of labor, land, and product markets as well as on strengthening industrial and education policies to address specific market failures around investment coordination and human capital formation.

Suggested Citation

  • Sen, Kunal, 2016. "The Determinants of Structural Transformation in Asia: A Review of the Literature," ADB Economics Working Paper Series 478, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0478
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    References listed on IDEAS

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    1. Joseph E. Stiglitz & Shahid Yusuf, 2001. "Rethinking the East Asian Miracle," World Bank Publications - Books, The World Bank Group, number 13969, December.
    2. Asep Suryahadi & Wenefrida Widyanti & Daniel Perwira & Sudarno Sumarto, 2003. "Minimum Wage Policy And Its Impact On Employment In The Urban Formal Sector," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 39(1), pages 29-50.
    3. Stiglitz, Joseph E, 1996. "Some Lessons from the East Asian Miracle," The World Bank Research Observer, World Bank, vol. 11(2), pages 151-177, August.
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    Cited by:

    1. Khan, Muhammad Aamir, 2020. "Cross sectoral linkages to explain structural transformation in Nepal," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 221-235.
    2. Gulshan Farooq BHAT & Sandeep KAUR, 2019. "Human Resource Development, Structural Transformation, Employment Generation And Innovation: India, China, Japan And South Korea, 1990-2016," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 19(1), pages 95-114.
    3. Ghanshyam Pandey & Seema Kumari, 2021. "Understanding agricultural growth and performance in Bihar, India," SN Business & Economics, Springer, vol. 1(10), pages 1-17, October.
    4. Dieppe, Alistair & Gilhooly, Robert & Han, Jenny & Korhonen, Iikka & Lodge, David, 2018. "The transition of China to sustainable growth – implications for the global economy and the euro area," Occasional Paper Series 206, European Central Bank.
    5. Abhijit Sen Gupta & Vishal More & Kanupriya Gupta, 2018. "Why Generating Productive Jobs is Essential for Reducing Poverty in India: Evidence from Indian Regions," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(4), pages 563-587, December.
    6. Roopali Aggarwal, 2021. "Comparative Analysis of Structural Transformation Process of Selected Asian Developing Economies," Journal of Asian Economic Integration, , vol. 3(1), pages 7-24, April.
    7. Sen Gupta, Abhijit & More, Vishal & Gupta, Kanupriya, 2016. "Structural Change and Poverty Reduction at Sub-State Levels in India," MPRA Paper 72740, University Library of Munich, Germany.

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    More about this item

    Keywords

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

    JEL classification:

    • 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
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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