Beyond Industrialization: New Approaches to Development Strategy Based on the Service Sector
Industrialization occupies a central place in the rich tapestry of development theory and practice. Although that place has varied over time, many have agreed with Nicholas Kaldor that the kind of economic growth that leads to high real income per capita can only occur through industrialization. This paper argues that it is becoming increasingly difficult for most developing countries to achieve rapid growth through industrialization, and especially through export oriented activities. But the key mechanisms seen as driving the industrial take-off in much of the literature (internal increasing returns, transfer of labour into higher value activities and pecuniary externalities) are alive and well, and are evident in services as well as in industry. Furthermore, China is actively trying to move from a strategy based on industrialization to one based much more on agriculture and services, as the costs of the current pattern of industrialization become prohibitive, and India has demonstrated that rapid growth based primarily on the services sector is possible. Thus more attention needs to be given to strategies based on the expansion of the agricultural and services sectors, and to the ways in which better services in rural areas and higher rural output can combine to achieve rapid growth and improved human welfare in poor countries.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: Katajanokanlaituri 6B, 00160 Helsinki|
Web page: http://www.wider.unu.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul M Romer, 1999.
"Endogenous Technological Change,"
Levine's Working Paper Archive
2135, David K. Levine.
- Steven N. Durlauf, 1991.
"Nonergodic Economic Growth,"
NBER Working Papers
3719, National Bureau of Economic Research, Inc.
- IANCHOVICHINA Elena & WALMSLEY Terrie, .
"Impact of China’s WTO Accession on East Asia,"
- Ianchovichina, Elena & Walmsley, Terrie, 2003.
"The impact of China's WTO accession on East Asia,"
Policy Research Working Paper Series
3109, The World Bank.
- Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
- Dasgupta, Sukti & Singh, Ajit, 2006. "Manufacturing, Services and Premature Deindustrialization in Developing Countries: A Kaldorian Analysis," Working Paper Series RP2006/49, World Institute for Development Economic Research (UNU-WIDER).
- Prema-Chandra Athukorala, 2008.
"Singapore And Asean In The New Regional Division Of Labor,"
The Singapore Economic Review (SER),
World Scientific Publishing Co. Pte. Ltd., vol. 53(03), pages 479-508.
- Prema-chandra Athukorala, 2006. "Singapore and ASEAN in the New Regional Division of Labour," Departmental Working Papers 2006-11, The Australian National University, Arndt-Corden Department of Economics.
- Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 501-526.
- Barry Eichengreen & Yeongseop Rhee & Hui Tong, 2007. "China and the Exports of Other Asian Countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(2), pages 201-226, July.
- Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1988.
"Industrialization and the Big Push,"
NBER Working Papers
2708, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:rp2008-60. 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: (Bruck Tadesse)
If references are entirely missing, you can add them using this form.