Thailand stands out in international comparison as a country with a high dispersion of productivity across sectors. It has especially low labor productivity in agriculture—a sector that employs a much larger share of the population than is typical for a country at Thailand’s level of income. This suggests large potential productivity gains from labor reallocation across sectors, but that process—which made a significant contribution to Thailand’s growth in the past—appears to have stalled lately. This paper establishes these facts and applies a simple model to discuss possible explanations. The reasons include a gap between the skills possessed by rural workers and those required in the modern sectors; the government’s price support programs for several agricultural commodities, particularly rice; and the uniform minimum wage. At the same time, agriculture plays a useful social and economic role as the employer of last resort. The paper makes a number of policy recommendations aimed at facilitating structural transformation in the Thai economy.

Simon Kuznets’ views about the inverted-U relationship between inequality and development and the process of structural transformation have long been under the lens of researchers. Over the last 20 years, immense potential for growth in Asia has been facilitated by structural transformation. However, it remains undecided whether the contribution of structural transformation will stay as a crucial factor in determining potential productivity growth and income distribution. This book brings together novel conceptual frameworks and empirical evidence from country case studies on topics related to structural transformation, globalization, and income inequality.

Thailand stands out in international comparison as a country with a high dispersion of productivity across sectors. It has especially low labor productivity in agriculture—a sector that employs a much larger share of the population than is typical for a country at Thailand’s level of income. This suggests large potential productivity gains from labor reallocation across sectors, but that process—which made a significant contribution to Thailand’s growth in the past—appears to have stalled lately. This paper establishes these facts and applies a simple model to discuss possible explanations. The reasons include a gap between the skills possessed by rural workers and those required in the modern sectors; the government’s price support programs for several agricultural commodities, particularly rice; and the uniform minimum wage. At the same time, agriculture plays a useful social and economic role as the employer of last resort. The paper makes a number of policy recommendations aimed at facilitating structural transformation in the Thai economy.

Structural transformation has resulted in an increasing share of services in aggregate value-added in advanced and developing countries across the world. We analyze the impact of this shift into services on countries’ efficiency in collecting the value-added tax (VAT). The analysis is based on two alternative measures of VAT efficiency: (1) the VAT C-efficiency, using a broad panel of 134 countries over the period 1970-2014; and (2) the VAT gap using a more granular, proprietary dataset that draws on the results of IMF’s Revenue Administraion-Gap Analysis Program covering 24 countries over the period 2004-2016. We find that a higher share of services in aggregate value-added reduces the VAT efficiency, and that this adverse effect is mainly a result of a rise of non-tradable services, which in turn contributes to a narrowing of the VAT base.

Provides in-depth evaluation of the development of rural life in Viet Nam over the past decade, combining a unique primary source of time-series panel data with the best micro-econometric analytical tools available.

The Routledge Handbook of Industry and Development is a global overview of industrialisation. Each chapter will provide readers with contemporary insights into this this essential aspect of economic development. Industrialisation has been at the forefront of discussion on economic development since the earliest days of development economics. But over the last fifty years, the manufacturing sectors of different countries and regions have grown at strikingly different rates. In 1960 developing countries took a very small share of global manufacturing production. Today the position had changed radically with fast growth of manufacturing in many parts of what was originally the developing world, particularly in China and the rest of East Asia. On the other hand, countries in Africa and parts of Latin America have been largely left behind by this process of industrialisation. This volume aims to illuminate this uneven development and takes stock of the current issues that hinder and support industrialisation in low and middle income economies. This Handbook is a collection of chapters on different aspects of industrialisation experience in a range of countries. Key themes include, the role of manufacturing in growth, the nature of structural change at different stages of development, the role of manufacturing in employment creation, alternative options for trade and industrial policy, the key role of technology and technical change, and the impact of globalisation and the spread of global value chains and foreign direct investment on prospects for industrialisation. Several chapters discuss individual country experiences with examples from India, Mexico, South Africa and Tanzania, as well as an overview of African industrialisation. This authoritative Handbook will be a key reference source for those studying or wishing to understand contemporary economic development. Offering inspiration and direction for future research, this landmark volume will be of crucial importance to all development economics scholars and researchers.