ABSTRACT
This chapter explains the links between services, economic growth and development. It presents the concepts and theoretical framework developed by Kaldor. The chapter discusses structural change in developing Asia, Latin America and Africa by means of fresh empirical data. It analyses long-term productivity-growth connections at sectoral level, and explains a sample of developing countries between 1975 and 2005. The chapter helps find diverse paths of sectoral transformation between the developed and the developing world in which a rapid emergence of services is taking place along with a declining contribution of industry. It also argues that the reallocation of workers to service activities may enhance or reduce productivity and growth in developing economies. Diverse patterns of structural change may contribute differently to productivity growth and, thus, to economic performance across developing regions.
