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

Author

Listed:
  • McMillan, Margaret

    (Tufts University)

  • Rodrik, Dani

    (Harvard University)

  • Sepulveda, Claudia

    (World Bank)

Abstract

Developing countries made considerable gains during the first decade of the 21st century. Their economies grew at unprecedented rates, resulting in large reductions 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 seven developing countries--Botswana, Ghana, Nigeria, Zambia, India, Vietnam and Brazil--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 which draws a distinction between the "structural transformation" and "fundamentals" challenge in growth. Out of these seven countries, the traditional path to rapid growth of export oriented industrialization only played a significant role in Vietnam.

Suggested Citation

  • McMillan, Margaret & Rodrik, Dani & Sepulveda, Claudia, 2017. "Structural Change, Fundamentals, and Growth: A Framework and Case Studies," Working Paper Series rwp17-024, Harvard University, John F. Kennedy School of Government.
  • Handle: RePEc:ecl:harjfk:rwp17-024
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    References listed on IDEAS

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    Cited by:

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    2. Matthew Fisher-Post, 2020. "Examining the Great Leveling: New Evidence on Midcentury American Inequality," PSE Working Papers hal-02876981, HAL.
    3. Bustos, Paula & Castro Vincenzi, Juan Manuel & Monras, Joan & Ponticelli, Jacopo, 2018. "Structural Transformation, Industrial Specialization, and Endogenous Growth," CEPR Discussion Papers 13379, C.E.P.R. Discussion Papers.
    4. Raymond Robertson, 2018. "Effects of regulating international trade on firms and workers," IZA World of Labor, Institute of Labor Economics (IZA), pages 439-439, June.
    5. Paula Bustos & Juan Manuel Castro-Vincenzi & Joan Monras & Jacopo Ponticelli, 2019. "Industrialization without Innovation," NBER Working Papers 25871, National Bureau of Economic Research, Inc.
    6. Candelon, Bertrand & Carare, Alina & Hasse, Jean-Baptiste & Lu, Jing, 2020. "The post-crises output growth effects in a globalized economy," International Economics, Elsevier, vol. 161(C), pages 139-158.
    7. Francisco José CALDERÓN VÁZQUEZ & Vikesh CHANDNANI SUKHWANI & Pablo PODADERA RIVERA, 2020. "Brexit and the Anglosphere: an intra-industry trade opportunity for India? Abstract: The present paper outlines a functionalist approach to the complex “Brexit” phenomenon, exploring those opportuniti," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 11, pages 186-210, June.
    8. Nina Pavcnik, 2017. "The Impact of Trade on Inequality in Developing Countries," NBER Working Papers 23878, National Bureau of Economic Research, Inc.
    9. Resnick, Danielle & Sivasubramanian, Bhavna & Idiong, Idiong Christopher & Ojo, Michael Akindele & Tanko, Likita, 2018. "The enabling environment for informal food traders in Nigeria’s secondary cities," NSSP working papers 59, International Food Policy Research Institute (IFPRI).
    10. S. Mahendra Dev, 2018. "Labour Market Inequalities in India: Dimensions and Policies," Indian Journal of Human Development, , vol. 12(2), pages 217-235, August.
    11. Charles Shaaba Saba & Nicholas Ngepah, 2020. "Empirical Analysis of Military Expenditure and Industrialisation Nexus: A Regional Approach for Africa," International Economic Journal, Taylor & Francis Journals, vol. 34(1), pages 58-84, January.
    12. Yismaw Ayelign & Lakhwinder Singh, 2019. "Comparison of Recent Developments in Productivity Estimation: Application on Ethiopian Manufacturing Sector," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(3), pages 20-31, September.
    13. Lyubimov, I. & Iakubovskii, I., 2020. "Economic and educational complexity in the Russian regions: Should they go hand in hand with each other?," Journal of the New Economic Association, New Economic Association, vol. 46(2), pages 187-197.

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    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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