ABSTRACT
Economic diversification, defined as the change in the degree, type, composition and quality of the economic sectors in an economy, affects human development in multiple ways. Modern approaches in development economics show that diversification is a driver and outcome of production expansion and income (Saviotti 1996; Hidalgo et al. 2007). Economic diversification leads to changes in the available choices in an economy, determining the number, type and quality of occupational choices, consumption goods and also life styles and the agency of the people. It goes together with institutional and technological changes which make the diversification of the economy into different sectors possible. This point was made in the opening words of Simon Kuznets’ Nobel Prize Lecture in Economics in 1971 (Kuznets 1971, p. 1):
A country’s economic growth may be defined as a long-term rise in capacity to supply increasingly diverse economic goods to its population, this growing capacity based on advancing technology and the institutional and ideological adjustments that it demands.
