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Marcia MacNeil


ne step in successful development

is getting a country’s workers to be more productive. Tere are two ways to ac- complish this. You can make the workers within each sector—such as agriculture, manufacturing, construction, and re- tail—more productive. Or you can move workers from less-productive sectors into more-productive ones.

Te second approach is what happened in developed countries such as the United States over the past two centuries: workers left subsistence farming and found jobs in factories and other modern, high-productivity industries. Farms became consolidated and targeted urban markets. Teir workers either moved to nonfarm rural work or to cities.

Economists call this movement of labor from low productivity to modern sectors “structural transformation.”

More recently, structural transforma- tion has taken place in China, India, and Tailand, where workers have left sub- sistence farming to take jobs in factories and other modern industries.

“Just about every country that has experi- 14

enced a sustained increase in income per capita has done so by moving its workers from low-productivity activities such as agriculture into more modern sectors of the economy,” explains Maggie McMil- lan, deputy director of IFPRI’s Develop- ment Strategy and Governance Division.

Why, then, are some countries not expe- riencing this type of growth-enhancing structural transformation? For example, in some Sub-Saharan African countries, workers are going back to the farm after working in manufacturing. It’s develop- ment in reverse.

McMillan and a group of her IFPRI col- leagues, including Deborah Brautigam, Xiaoyang Tang, Shashi Kolavalli, Inigo Verduzco, Alan De Brauw, Valerie Muel- ler, and Hak Lim Lee, are examining the state of structural change in Africa, and many of their findings will appear in a forthcoming special issue of the journal World Development.


In developing countries, the gap between productivity in agriculture and in more modern sectors is extraordinarily large.

Workers in other sectors are often two to three times more productive than agricultural workers. In Ethiopia, for ex- ample, the productivity gaps are so large that if labor were reallocated to resemble the distribution of workers across sectors in the United States, output per worker would rise sevenfold.

Despite the obvious benefits of mod- ernsector work, labor in Sub-Saharan Africa is moving the other way. Between 1990 and 2005 workers in the region on average moved from high- to low- productivity work, and regional growth declined by 1.3 percentage points a year, according to McMillan.

Migration patterns, demographics, and globalization all provide clues about why this is hap- pening. As a country develops, workers typically migrate from rural farming to more urban areas in search of high-paying jobs. In Africa, however, IFPRI research shows people migrating at an extremely low rate, per- haps because of policies discouraging migration,

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