|Dr. Alejandro Lavopa
Structural transformation and economic development. Can development traps be avoided?
Adam Szirmai & Bart Verspagen
This thesis addresses a classic issue in economic thinking: why some countries remain poor while others manage to reach the living standards of advanced economies, reducing their gaps in terms of technology, income and social welfare. In addressing this question the thesis postulates that success (or failure) in economic development is closely related to the ability of developing countries to perform two major transformations: structural change (i.e., the absorption of labour force in modern activities) and technological catch-up (i.e., the reduction of the technological gap with the world frontier). An in-deep empirical analysis of the last 60 years over a sample of 100 countries demonstrates that the most successful economies have been those that managed to achieve simultaneously the two transformations. The less successful ones, instead, have been unable to perform these transformations and ended up in low- or middle-income traps, in which only a fraction of the society can reap the benefits of the international flows of technological knowledge.