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  • 2017
  • Working Paper

Structural Transformation: A Competitiveness-based View

By: Christian H.M. Ketels
  • Format:Electronic
  • | Language:English
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Abstract

Competitiveness research aims to enhance our understanding of the drivers of prosperity differences across locations and of policies that can sustainably raise a location’s prosperity level. The paper outlines key elements of the competitiveness framework and discusses how it relates to the idea of structural transformation. What emerges are significant similarities between the two approaches: They both take a granular and often sector-specific perspective on microeconomic structures and systems, moving beyond macroeconomic, economy-wide, or single-factor microeconomic explanations of prosperity and development. But the analysis also reveals meaningful differences between the two: Most fundamentally, the chapter argues, the competitiveness literature treats sectoral composition as a key but largely endogenous part of development, while structural economies conceptualizes it as a fundamental driver. Competitiveness policy is about leveraging existing clusters as a platform for upgrading microeconomic fundamentals, where structural policies aim to change the industrial composition of an economy more directly. While recent work has significantly narrowed the differences between the two approaches, the chapter points out where and how they still matter, especially for policy practice. Further dialogue between the approaches, the chapter concludes, could lead to actionable advice on more robust policies that drive both structural change and competitiveness upgrading.

Keywords

Competitiveness; Cluster; Development; Growth; Economic Policy; Competition; Development Economics; Economic Growth; Policy

Citation

Ketels, Christian H.M. "Structural Transformation: A Competitiveness-based View." African Development Bank Group Working Paper, No. 258, May 2017.
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About The Author

Christian H.M. Ketels

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  • India’s Quest for Sustainable Growth in a New Global Reality:: The Need for a Region- and Sector-Driven Approach By: Christian H.M. Ketels and Michael E. Porter
  • Competitiveness Roadmap for India@100 By: Michael E. Porter and Christian H.M. Ketels
  • Industrial Policy in a New Global Reality: Towards a More Location—and Sector—Driven Approach By: Christian H.M. Ketels and Emiliano Duch
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