Professor Dani Rodrik will be at CGD on Thursday, giving the annual Sabot lecture. He will be speaking on African growth, and will likely discuss premature de-industrialization, a topic he first raised in this blog post and has written about subsequently.
In a forthcoming paper with Amrit Amirapu (on manufacturing in India), we illustrate this idea in a different way, depicted in the chart below.
This chart plots the relationship between the share of a country's total employment in the industrial sector against its level of development, measured by its per capita GDP (PPP dollars). The sample includes all countries for which data are available in the World Bank's World Development Indicators (excluding the oil exporters). The relationship is shown for three different points in time, 1988 (blue), 2000 (green), and 2010 (red).
The relationship is typically an inverted U, suggesting that over the course of development a country first industrializes, reflected in a rising share of resources, including labor, devoted to this sector. Thereafter, the services sector becomes more important, so that de-industrialization begins, reflected in a declining share of employment.
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