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Title:Beyond industrialization: New approaches to development strategy based on the service sector PDF Logo
Authors:Sheehan, Peter
Issue Date:2008
Series/Report no.:Research paper / UNU-WIDER 2008.60
Abstract:Industrialization occupies a central place in the rich tapestry of development theory and practice. Although that place has varied over time, many have agreed with Nicholas Kaldor that the kind of economic growth that leads to high real income per capita can only occur through industrialization. This paper argues that it is becoming increasingly difficult for most developing countries to achieve rapid growth through industrialization, and especially through export oriented activities. But the key mechanisms seen as driving the industrial take-off in much of the literature (internal increasing returns, transfer of labour into higher value activities and pecuniary externalities) are alive and well, and are evident in services as well as in industry. Furthermore, China is actively trying to move from a strategy based on industrialization to one based much more on agriculture and services, as the costs of the current pattern of industrialization become prohibitive, and India has demonstrated that rapid growth based primarily on the services sector is possible. Thus more attention needs to be given to strategies based on the expansion of the agricultural and services sectors, and to the ways in which better services in rural areas and higher rural output can combine to achieve rapid growth and improved human welfare in poor countries.
Subjects:industrialization
services
development strategy
rapid growth
JEL:O11
O14
ISBN:978-92-9230-108-8
Document Type:Working Paper
Appears in Collections:WIDER Research Papers, United Nations University (UNU)

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