Topic 4: Promoting Structural Change and Institutional Development
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Overview
- Low-income countries (LICs) face an increasingly challenging external environment: slowing global growth under the ongoing COVID-19 crisis; sharp declines with high volatility in commodity prices; and tighter external funding conditions. These developments have raised concerns about a prolonged growth slowdown and elevated the priority of structural reforms in LICs.
- Strengthening governance and tackling corruption are identified as necessary for successful progress on many reforms.
- The work is carried out under the FCDO-IMF partnership on research on the macroeconomics of LICs, spanning four phases covering March 2012 to March 2025.
Evolution of the FCDO-IMF research collaboration
- Phase 1: March 2012 to March 2015
- Phase 2: April 2015 to March 2017
- Phase 3: April 2017 to March 2020
- Phase 4: April 2020 to March 2025
- Outputs associated with the partnership are catalogued as "Year 1 to 13 (Excel)" and by individual year reports for each phase.
Major achievements and outputs by phase
- Phase 1 (March 2012 to March 2015)
- Focus: growth through diversification and structural transformation.
- Major achievement: construction of a new publicly available diversification toolkit enabling assessment of potential for further transformation and quality upgrading in LICs.
- Other outputs: policy papers "Economic Diversification in LICs: Stylized Facts and Macroeconomic Implications" and "Sustaining Long-run Growth and Macroeconomic Stability in Low-income countries—The Role of Structural Transformation and Diversification"; conference on "Diversification and Structural Transformation for Growth and Stability in Low-Income Countries".
- Phase 2 (April 2015 to March 2017)
- Focus: extend the diversification toolkit to include services exports; examine the link between gender and diversification; expand training on toolkit usage.
- Outputs include: working paper "World Trade in Services: Evidence from A New Dataset"; working paper "Gender Equality and Economic Diversification"; policy paper "From Ambition to Execution: Policies in Support of Sustainable Development Goals".
- Phase 3 (April 2017 to March 2020)
- Research plan three-fold:
- Encourage greater uptake of the Diversification Toolkit and enhance its value.
- Construct a comprehensive database on structural reforms and policies to identify which policies delivered inclusive growth and facilitated structural transformation.
- Study strategies for maintaining growth in a weaker external environment, including through strengthening governance.
- Achievements include: applications of the diversification toolkit on Sub-Saharan Africa, Guinea-Bissau, and Vanuatu; paper "Structural Reforms and Elections: Evidence from a World-Wide New Dataset"; high level conference "Global Transformations: Challenges and Opportunities for Developing Economies".
- Phase 4 (April 2020 to March 2025)
- Focus areas:
- Diversification and interactions with development and industrial policies.
- Automation and the changing landscape of structural transformation in LICs.
- State fragility, economic consequences, and shock mitigation.
- Outputs for years 9-13 are indicated as forthcoming.
Tools, datasets, and capacity building
- Diversification Toolkit:
- Initially developed under phase 1; extended under phase 2 to include services exports.
- Subject to wider uptake and enhancements during phase 3, with applications to specific countries and regions.
- Databases and datasets:
- Phase 3 included construction of a comprehensive database on structural reforms and policies.
- Research output referenced working papers and new datasets (e.g., services trade dataset; world-wide dataset on structural reforms and elections).
- Training and dissemination:
- Phase 2 emphasized expanded training on how to use the diversification toolkit.
- Phase 3 prioritized encouraging uptake and increasing the toolkit's value through enhancements and country/regional applications.
Policy implications and research priorities
- Prioritized policy agenda items for LICs:
- Structural reforms to support diversification and long-run growth.
- Strengthening governance and addressing corruption to enable reform implementation.
- Policies to manage and mitigate shocks from volatile commodity prices and tighter external financing.
- Understanding interactions between diversification, development policy, and industrial policy.
- Assessing the impact of automation on structural transformation pathways.
- Addressing state fragility and designing shock-mitigation strategies.
Project management and contact
- Project Managers: Petia Topalova; Emine Boz
- Contact: MacroResDev@imf.org
Content in this bundle
- June 2019
- June 2020
- June 2021
- June 2022
- June 2023
- June 2024
- June 2025
- Call to Donors to Strengthen IMF Research Capacity for Low-Income Countries
- Macroeconomic Research in Low Income Countries — June 2013
- Macroeconomic Research in Low Income Countries — June 2014
- June2015
- Annual Review of the Macroeconomic Research in Low Income Countries project
- June2017
- MRLIC programme review — By March 2018
- List of Outputs: Year 1 to 13 (XLSX)
- Dec 2018, Vol.6
- Dec 2019, Vol.7
- Dec 2020, Vol.8
- Dec 2021, Vol.9
- Dec 2022, Vol.10
- Dec 2023, Vol.11
- Dec 2024, Vol.12
- Dec 2025, Vol.13
- Jun 2018, Vol.6
- Jun 2019, Vol.7
- Jun 2020, Vol.8
- Jun 2021, Vol.9
- Jun 2022, Vol.10
- Jun 2023, Vol.11
- Jun 2024, Vol.12
- Jun 2025, Vol.13 (PDF)
- Mar 2018, Vol.6
- Mar 2019, Vol.7
- Mar 2020, Vol.8
- Mar 2021, Vol.9
- Mar 2022, Vol.10
- Mar 2023, Vol.11
- Mar 2024, Vol.12 (PDF)
- Mar 2025, Vol.13
- Mar 2026, Vol.14
- Sep 2018, Vol.6
- Sep 2019, Vol.7
- Sep 2020, Vol.8
- Sep 2021, Vol.9
- Sep 2022, Vol.10
- Sep 2023, Vol.11
- Sep 2024, Vol.12
- Sep 2025, Vol.13 (PDF)
- Devarajan–O'Connell final report on the MRLIC project
- Policy Paper (2014) (PDF)
- From Ambition to Execution: Policies in Support of Sustainable Development Goals (PDF)
References