How rich countries became rich and why poor countries remain poor: It's economic structure ... duh!

Arbeitspapier

Becoming a rich country requires the ability to produce and export commodities that embody certain characteristics. We classify 779 exported commodities according to two dimensions: (1) sophistication (measured by the income content of the products exported); and (2) connectivity to other products (a well-connected export basket is one that allows an easy jump to other potential exports). We identify 352 good products and 427 bad products. Based on this, we categorize 154 countries into four groups according to these two characteristics. There are 34 countries whose export basket contains a significant share of good products. We find 28 countries in a middle product trap. These are countries whose export baskets contain a significant share of products that are in the middle of the sophistication and connectivity spectra. We also find 17 countries that are in a middle-low product trap, and 75 countries that are in a difficult and precarious low product trap. These are countries whose export baskets contain a significant share of unsophisticated products that are poorly connected to other products. To escape this situation, these countries need to implement policies that would help them accumulate the capabilities needed to manufacture and export more sophisticated and better connected products.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 644

Classification and Topics

• Classification: Wirtschaft ; Industrialization; Manufacturing and Service Industries; Choice of Technology ; Industrial Policy ; Comparative Studies of Countries
• Subject: bad product ; capabilities ; low product trap ; middle product trap ; proximity ; sophistication ; structural transformation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Felipe, Jesus ; Kumar, Utsav ; Abdon, Arnelyn
• Event: Veröffentlichung
• (who): Levy Economics Institute of Bard College
• (where): Annandale-on-Hudson, NY
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/57020
• Last update: 10.03.2025, 11:41 AM CET