World Economic and Social Survey 2006

Diverging Growth and Development

image of World Economic and Social Survey 2006

The World Economic and Social Survey provides objective analysis of pressing long-term social and economic development issues, and discusses the positive and negative impact of corresponding policies. The analyses are supported by analytical research and data included in the annex. According to the 2006 edition of the Survey, in the industrialized world, the income level over the last five decades has grown steadily while it has failed to do so in many developing countries, thereby causing a rise in already high world inequality.



Structural change and economic growth

Ail essential insight of classical development economics was that economic growth is intrinsically linked to changes in the structure of production. According to this view, industrialization is the driver of technical change, and overall productivity increases are mainly the result of the reallocation of labour from low— to high-productivity activities. The present chapter investigates to what extent this view is still relevant today and thus how the degree and nature of structural change explain the diverging growth trends between developing countries.


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