Applying the Growth Identification and Facilitation Framework to the Least Developed Countries: The Case of Uganda

This paper aims to draw insights from New Structural Economics by applying its practical policy tool – the Growth Identification and Facilitation Framework (GIFF) – to least-developed countries (LDCs) with a special focus on the case of Uganda. The GIFF offers practical development paths for enabling developing countries to follow comparative advantage in its industrial development and to tap into the potential of advantages of backwardness in industrial upgrading in an effort to achieve sustained and dynamic growth. After a brief introduction of the GIFF, we present an overview of Uganda’s recent economic and social performance and analyses Uganda’s factor endowments, i.e., land (or natural resources), labour and capital that can be used in the production process. After identifying tradable goods and services which would fit Uganda’s latent comparative advantage, we diagnose sector-specific binding constraints in starting and scaling up the selected subsectors and discuss how to remove or mitigate these key constraints. Finally, we conclude with main findings and policy recommendations. The take-home message is that developing countries should not focus on what they lack but what they have when formulating their development strategies.