What impedes structural transformation in Asia?

Kunal Sen

Asia-Pacific Sustainable Development Journal, 2018, vol. 25, issue 1, 1-35

Abstract: Structural transformation – the movement of workers from low productivity to high productivity activities – is an essential ingredient of inclusive growth. In the present paper, evidence on why the pace of structural transformation has differed widely across countries in Asia is reviewed, with a specific focus on China, India and Thailand. It is argued that government failures relating to the functioning of labour, land and product markets, and market failures relating to coordination of investment, credit market imperfections and human capital formation have been the primary causes of the slow pace of structural transformation in several Asian countries. In the paper, it is suggested that emphasis be placed on reforming policies that impede the functioning of labour, land and product markets and strengthening industrial and education policies to tackle specific market failures pertaining to investment coordination and human capital formation.

Keywords: structural transformation; government failure; market failure; Asia (search for similar items in EconPapers)
JEL-codes: O14 O53 P51 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:unt:japsdj:v:25:y:2018:i:1:p:1-35

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