Patterns of Structural Change in Developing Countries

Produced by: 
University of Groningen
Available from: 
July 2014
Paper author(s): 
Marcel Timmer (University of Groningen)
Gaaitzen de Vries (University of Groningen)
Klaas de Vries (The Conference Board, Brussels)
Globalization - Trade
Microeconomics - Competition - Productivity

This paper introduces the updated and extended Groningen Growth and Development Centre (GGDC) 10-Sector database. The database includes annual time series of value added and persons employed for ten broad sectors of the economy from 1950 onwards. It now includes eleven countries in Asia (China has been added compared to the previous release), nine in Latin America and eleven in Sub-Saharan Africa. We use the GGDC 10-Sector database to document patterns of structural change in developing countries. We find that the expansion of manufacturing activities during the early post World War II period was related to a growth-enhancing reallocation of resources in most countries in Asia, Africa and Latin America. This process of structural change stalled in many African and Latin American countries during the mid-1970s and 1980s. When growth rebounded in the 1990s, workers mainly relocated to market services industries, such as retail trade and distribution. Though such services have higher productivity than much of agriculture, they are not technologically dynamic and have been falling behind the world frontier.


Research section: 
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