Publication: Growth Identification and Facilitation : The Role of the State in the Dynamics of Structural Change
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Published
2011
ISSN
09506764
Date
2012-03-30
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The historical record 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 puts forward a new approach to help policymakers in developing countries identify those industries that may hold latent comparative advantage and recommends ways of removing binding constraints to facilitate private firms' entry into those industries. Two types of government interventions are distinguished, first are policies that facilitate structural change by overcoming information and coordination and externality issues, which are intrinsic to industrial upgrading and diversification; and second policies aimed at protecting some selected firms and industries that defy the comparative advantage determined by the existing endowment structure.
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Publication Growth Identification and Facilitation : The Role of the State in the Dynamics of Structural Change(2010-05-01)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.Publication The State and International Development Management: Commentary from International Development Management Practitioners(2008)Poverty, instability, terrorism, and the emergence of new global actors characterize some of the central challenges facing twenty-first-century development and administration. Derick W. Brinkerhoff, a distinguished scholar in this field, delivered this Ferrel Heady Roundtable Lecture in 2007. He explores broadly the evolution of contemporary thinking concerning international development management. From his analysis, he draws thought-provoking clues regarding what works and what research questions remain to be answered. His central thesis: Lessons from past experience need to better inform current policy and practice. Five seasoned development administrators respond critically to Brinkerhoff's arguments, offering PAR readers an informative, insightful, and germane intellectual exchange.Publication Applying the Growth Identification and Facilitation Framework : The Case of Nigeria(2011-08-01)This paper applies the Growth Identification and Facilitation Framework developed by Lin and Monga (2010) to Nigeria. It identifies as appropriate comparator countries China, India, Indonesia, and Vietnam, and selects a wide range of industries in which these comparator countries may be losing their comparative advantage and which may therefore lend themselves to targeted interventions of the government to fast-track growth. These industries include food processing, light manufacturing, suitcases, shoes, car parts, and petrochemicals. The paper also discusses binding constraints to growth in each of these value chains as well as mechanisms through which governance-related issues in the implementation of industrial policy could be addressed.Publication Trade Facilitation, Value Creation, and Competiveness : Policy Implications for Vietnam's Economic Growth, Volume 1(World Bank, Washington, DC, 2013-07-15)This report explores the role of trade facilitation and logistics in driving export and ultimately national competitiveness. It posits that this area of trade consists of three interrelated pillars: (i) transport infrastructure and logistics services; (ii) regulatory procedures for exports and imports; and (iii) supply chain organization. Transport infrastructure and logistics services relate to the physical aspects of trade flows. Logistics services include a variety of services, the most important of which are transportation, storage and consolidation. This summary is organized into nine sections. After the introduction, section two presents the conceptual framework for this study. The economic context under which trade facilitation is discussed is outlined in section three. It describes Vietnam's evolving structure of trade and competitiveness. The country's trade logistics is part of this structure and this is germane to understanding the key issues and solutions proposed. This is followed by discussion of the three pillars of trade facilitation in sections four to six and then section seven presents the institutional framework underpinning these pillars. Section eight then pulls together the diverse roles of government, such as setting policies, acting as regulator, and being the facilitator working in collaboration with key stakeholders. The conclusion, section nine, suggests a set of recommendations.Publication Endowment Structures, Industrial Dynamics, and Economic Growth(2009-09-01)This paper develops a dynamic general equilibrium model to explore industrial evolution and economic growth in a closed developing economy. The authors show that industries will endogenously upgrade toward the more capital-intensive ones as the capital endowment becomes more abundant. The model features a continuous inverse-V-shaped pattern of industrial evolution driven by capital accumulation: As the capital endowment reaches a certain threshold, a new industry appears, prospers, then declines and finally disappears. While the industry is declining, a more capital-intensive industry appears and booms, ad infinitum. Explicit solutions are obtained to fully characterize the whole dynamics of perpetual structural change and economic growth. Implications for industrial policies are discussed.
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