Photo: Dikaseva / Unsplash

The developer’s dilemma

Structural transformation, inequality dynamics, and inclusive growth
This project explores the relationship between structural transformation, inequality, and inclusive growth to deepen our understanding of the possibilities of the different roads to structural transformation and how each pathway shapes development.

The ‘developer’s dilemma’ is the potential trade-off between structural change and inclusive growth. How to manage this dilemma is a central question facing many developing countries pursuing economic development.

Structural transformation — the movement of workers from lower to higher productivity activities — has long been regarded as an essential feature of rapid and sustained growth but has been historically associated with rising income inequality in the well-known Kuznets hypothesis. At the same time, inclusive growth is more likely with steady or even falling inequality, with the benefits of economic growth shared broadly and especially to the poorest.

This project explores this tension by taking a close look at (i) what we know about structural change in developing countries; (ii) where and when a trade-off has arisen and why; and (iii) the experiences of how countries that have sought to manage the tension through policy.

The project’s aim is to understand better the possibilities of the different roads to structural transformation and how each pathway shapes development.

A key output of the project will be an edited volume on the relationship between structural transformation, inequality, and inclusive growth. Bringing together empirical research and analysis from leading international scholars, it distils wide-ranging insights from a global survey and case studies from low- and middle-income countries —including Brazil and Chile from Latin America, Ghana and South Africa from sub-Saharan Africa, Bangladesh and India from South Asia, and China, Indonesia and Thailand from East and South-East Asia.

Key questions
  • What are the likely trade-offs between structural change and inclusive growth?
  • What models of economic development are likely to ensure rapid economic growth, structural change, and poverty reduction?
  • How are governments to use public policy to manage the trade-off between structural change and inclusive growth?
Watch this space

A mid-term project workshop was held in September 2019 in Bangkok at UNESCAP.

A set of papers addressing the structural transformation–inclusive growth relationship was presented in panels at the WIDER Development Conference ‘Transforming economies – for better jobs’ in September 2019, also in Bangkok at UNESCAP. These papers will be revised and updated to address peer comments, then published as an edited volume under the project.

All working papers, events, briefs, blog posts, and opportunities to engage relating to the project will be made available on this webpage.

UN's 2030 Agenda for Sustainable Development

The research will address Goal 5: Gender equality; Goal 8: Decent work and economic growth; and Goal 10: Reduced inequalities.

Context

Main subject
This project is part of Varieties of structural transformation

Theme: Current programme