Growth Identification and Facilitation: The Role of the State in the Dynamics of Structural Change
319 citations recorded by the source corpus.
Active economic policies by developing countries’ governments to promote growth and industrialization have generally been viewed with suspicion by economists, and for good reasons: past experiences show that such policies have too often failed to achieve their stated objectives. But the historical record also indicates that in all successful economies, the state has always played an important role in facilitating structural change and helping the private sector sustain it across time. This paper proposes a new approach to help policymakers in developing countries identify those industries that may hold latent comparative advantage. It also recommends ways of removing binding constraints to facilitate private firms’ entry into those industries. The paper introduces an important distinction between two types of government interventions. First are policies that facilitate structural change by overcoming information and coordination and externality issues, which are intrinsic to industrial upgrading and diversification. Such interventions aim to provide information, compensate for externalities, and coordinate improvements in the"hard"and"soft"infrastructure that are needed for the private sector to grow in sync with the dynamic change in the economy’s comparative advantage. Second are those policies aimed at protecting some selected firms and industries that defy the comparative advantage determined by the existing endowment structure—either in new sectors that are too advanced or in old sectors that have lost comparative advantage.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/2d770c5e225593d4ff5726e83b39aa8aa8fc5b83
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In Economics and Econometrics
Citations in the corpus
- Sustainability-oriented innovation systems – managing the green transformation (2012, unknown): “…change mitigation and adaptation; • agree on new forms of multilateral cooperation on science, technology and innovation; and 9 Most prominently, Lin and Monga (2010) call for ‘latent comparative advantages’ to be made the focus, meaning that support should be given only to industries that have…”
- “Going Global in Groups”: Structural Transformation and China’s Special Economic Zones Overseas (2014, background): “Economists have emphasized that clusters take advantage of agglomeration economies, economies of scale, reduce transactions, and search costs (Greenwald & Stiglitz, 1986; Krugman, 1991; Lin & Monga, 2011) “GOING GLOBAL IN GROUPS” 79 http://daneshyari.com/article/991355”