Structural transformation — old and new paths to economic development

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    Project Manager :
    Kunal Sen

    The movement of workers from agriculture to manufacturing, and then to services is the path of structural transformation that has been witnessed in all countries which comprise the high-income club as well the successful growth experiences of East Asia. This path of structural transformation has received a great deal of attention among economists, and underpins most of the theoretical understanding of structural transformation all the way from scholars in classical economics — such as Kuznets, Lewis, Chenery, Syrquin — to more modern approaches that are rooted in the neoclassical tradition. Such a view underpins the well-known argument of Kuznets, who argued that structural transformation can lead to higher inequality, at least initially (the so-called ‘Kuznets process’). Indeed, the emblematic view of structural transformation as a process of movement of workers first from agriculture to manufacturing, then on to services remains a powerful unifying vision of the process of economic development among both scholars and policy makers.

    The goal of the project is to increase understanding among academics about new routes to structural transformation and economic development in contemporary settings. We will document a different path of structural transformation where workers are moving directly from agriculture to services, which as a sector does not have the same productivity gains that we observe in manufacturing.

    The project will deliver the monograph ‘Varieties of structural transformation — patterns, drivers, and consequences’, authored by Kunal Sen, the Director of UNU-WIDER, and slated to be published by Oxford University Press in 2023.

    Key questions:

    What are the drivers of new forms of structural transformation versus old forms?
    What are the jobs and livelihoods implications of old and new forms of structural transformation for women and disadvantaged groups in particular?
    What are the implications of old and new forms of structural transformation for economic growth?
    What are the poverty and inequality dynamics of new forms of structural transformation?

    Upon the launch of the UNU-WIDER Work Programme 2019-2023 the research programme was divided into 6 flagship projects. Two years into the work programme these flagships have matured into several standalone projects, of which “Structural transformation — old and new paths to economic development” originally under “Varieties of structural transformation” is one. As of 1 January 2021, this project has been included in Pelikan as its own entry.