Factor Reallocation and Growth in Developing Countries

Author/Editor:

Helene Poirson

Publication Date:

June 1, 2000

Electronic Access:

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Summary:

This paper examines the extent to which developing countries benefit from intersectoral factor transfers by specifying the impact and determinants of sectoral changes and of the degree of dualism (or allocation inefficiency) in a dual economy model. Conditions under which factor reallocation is growth-enhancing are derived. An empirical error-correction equation is estimated for 30 developing countries during 1965-80. Results suggest that labor reallocation effects are especially important in countries with high rates of investment (and thus high rates of labor transfer) and/or at low levels of development (and thus high degrees of dualism).

Series:

Working Paper No. 2000/094

Subject:

Capital productivity Expenditure Human capital Labor Labor productivity Production Public expenditure review

English

Publication Date:

June 1, 2000

ISBN/ISSN:

9781451851717/1018-5941

Stock No:

WPIEA0942000

Pages:

29

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