## Topic 4: Promoting Structural Change and Institutional Development

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**Canonical URL:** [Topic 4: Promoting Structural Change and Institutional Development](https://www.imf.org/en/topics/low-income-countries/macro-research-for-development/promoting-structural-change-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 2019 (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/annual-reports/dfid-ar-june2019.pdf.md){rel="alternate" type="text/markdown"}
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- **June 2020**
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- **June 2021**
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- **June 2022**
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- **June 2023**
  - [June 2023 (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/annual-reports/fcdo-ar-june2023.pdf.md){rel="alternate" type="text/markdown"}
  - [June 2023 (PDF)](/-/media/files/topics/lics/macro-research-for-development/annual-reports/fcdo-ar-june2023.pdf){rel="external" type="application/pdf"}
- **June 2024**
  - [June 2024 (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/annual-reports/fcdo-ar-june2024.pdf.md){rel="alternate" type="text/markdown"}
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- **June 2025**
  - [June 2025 (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/annual-reports/fcdo-ar-june2025.pdf.md){rel="alternate" type="text/markdown"}
  - [June 2025 (PDF)](/-/media/files/topics/lics/macro-research-for-development/annual-reports/fcdo-ar-june2025.pdf){rel="external" type="application/pdf"}
- **Call to Donors to Strengthen IMF Research Capacity for Low-Income Countries**
  - [Call to Donors to Strengthen IMF Research Capacity for Low-Income Countries (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/call-to-donors-to-strengthen-imf-research-capacity-for-low-income-countries-nov-2025.pdf.md){rel="alternate" type="text/markdown"}
  - [Call to Donors to Strengthen IMF Research Capacity for Low-Income Countries (PDF)](/-/media/files/topics/lics/macro-research-for-development/call-to-donors-to-strengthen-imf-research-capacity-for-low-income-countries-nov-2025.pdf){rel="external" type="application/pdf"}
- **Macroeconomic Research in Low Income Countries — June 2013**
  - [Macroeconomic Research in Low Income Countries — June 2013 (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/documents/june2013.pdf.md){rel="alternate" type="text/markdown"}
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- **Macroeconomic Research in Low Income Countries — June 2014**
  - [Macroeconomic Research in Low Income Countries — June 2014 (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/documents/june2014.pdf.md){rel="alternate" type="text/markdown"}
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- **June2015**
  - [June2015 (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/documents/june2015.pdf.md){rel="alternate" type="text/markdown"}
  - [June2015 (PDF)](/-/media/files/topics/lics/macro-research-for-development/documents/june2015.pdf){rel="external" type="application/pdf"}
- **Annual Review of the Macroeconomic Research in Low Income Countries project**
  - [Annual Review of the Macroeconomic Research in Low Income Countries project (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/documents/june2016.pdf.md){rel="alternate" type="text/markdown"}
  - [Annual Review of the Macroeconomic Research in Low Income Countries project (PDF)](/-/media/files/topics/lics/macro-research-for-development/documents/june2016.pdf){rel="external" type="application/pdf"}
- **June2017**
  - [June2017 (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/documents/june2017.pdf.md){rel="alternate" type="text/markdown"}
  - [June2017 (PDF)](/-/media/files/topics/lics/macro-research-for-development/documents/june2017.pdf){rel="external" type="application/pdf"}
- **MRLIC programme review — By March 2018**
  - [MRLIC programme review — By March 2018 (Markdown version)](/-/media/files/topics/lics/macro-research-for-development/documents/june2018.pdf.md){rel="alternate" type="text/markdown"}
  - [MRLIC programme review — By March 2018 (PDF)](/-/media/files/topics/lics/macro-research-for-development/documents/june2018.pdf){rel="external" type="application/pdf"}
- [List of Outputs: Year 1 to 13 (XLSX)](/-/media/files/topics/lics/macro-research-for-development/listofoutputs.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"}
- **Dec 2018, Vol.6**
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- **Dec 2019, Vol.7**
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- **Dec 2020, Vol.8**
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- **Dec 2021, Vol.9**
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- **Dec 2023, Vol.11**
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- **Dec 2024, Vol.12**
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- **Dec 2025, Vol.13**
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- **Jun 2018, Vol.6**
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- **Devarajan–O'Connell final report on the MRLIC project**
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- [Policy Paper (2014) (PDF)](/external/np/pp/eng/2014/030514.pdf){rel="external" type="application/pdf"}
- [From Ambition to Execution: Policies in Support of Sustainable Development Goals (PDF)](/external/pubs/ft/sdn/2015/sdn1518.pdf){rel="external" type="application/pdf"}

---

## References

- [Modelling policy choices](https://www.imf.org/en/topics/low-income-countries/macro-research-for-development/modeling-policy-choices)
- [Understanding macro-financial linkages](https://www.imf.org/en/topics/low-income-countries/macro-research-for-development/understanding-macro-financial-linkages)
- [Building resilience](https://www.imf.org/en/topics/low-income-countries/macro-research-for-development/building-resilience)
- [Enhancing inclusion](https://www.imf.org/en/topics/low-income-countries/macro-research-for-development/enhancing-inclusion)
- [Advances Made in Five Key Areas Through a FCDO-IMF Collaboration](https://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/Issues/2021/03/24/Macroeconomic-Research-in-Low-income-Countries-Advances-Made-in-Five-Key-Areas-Through-a-50010)
- [Economic Diversification in LICs: Stylized Facts and Macroeconomic Implications](https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2016/12/31/Economic-Diversification-in-LICs-Stylized-Facts-and-Macroeconomic-Implications-40166)
- [World Trade in Services: Evidence from A New Dataset](https://www.imf.org/en/Publications/WP/Issues/2017/03/29/World-Trade-in-Services-Evidence-from-A-New-Dataset-44776)
- [Gender Equality and Economic Diversification](https://www.imf.org/en/Publications/WP/Issues/2016/12/31/Gender-Equality-and-Economic-Diversification-44091)
- [Sub-Saharan Africa, Guinea-Bissau, and Vanuatu](https://www.imf.org/en/Publications/REO/SSA/Issues/2017/10/19/sreo1017)

_Source: https://www.imf.org/en/topics/low-income-countries/macro-research-for-development/promoting-structural-change-institutional-development_
