The Central Role of Services in Economic Development: Externalities, Growth, and Public Policy
Strategic services play a pivotal, but largely unrecognized, role in the early growth and development of market economies. The failure to appreciate their importance at early stages of development has led to the selection of policies which often fail to support the growth of service industries, thus limiting the development of all sectors. It is well recognized that division of labor is a major source of economic development and growth. In this paper, strategic (or organizational) services are shown to be an integral part of this progressive division of labor, and therefore of development itself. In addition, strategic services generate positive externalities which affect all other sectors in the economy, and therefore create an opportunity for supportive public policies. These positive externalities are eventually overwhelmed by the negative effects of the service network congestion and rising average costs as the service industry matures. Industrialized countries are in a unique position to offer information concerning the evolution of services throughout the entire market development process from the early stages through maturity. The United States, having arguably traveled farthest down the road toward deregulation of its service industries, provides a particularly good case study for determining the role of services in market development as well as the evolution of public policy relating to services during the development process. An empirical study of forty years of U.S. service data supports the theoretical assertions regarding the early importance and the dynamic path of service industry development and therefore the changing policy prescriptions. The lessons are then applied to the case of developing countries.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||Sep 1994|
|Publication status:||Published in Journal of Economic Development, December 1994, Vol. 19:2.|
|Contact details of provider:|| Phone: (508)793-3362|
Fax: (508) 793-3708
Web page: http://www.holycross.edu/departments/economics/website/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:hcx:wpaper:9406. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.