Economic Growth Strategies: Has the Effect of Development Strategy upon Growth Changed over time?
Master of Science
Department or Program
Structural strategies have been adopted by many developing countries to reduce the income/technology gap between them and advanced countries. Results have been mixed, however; most countries have failed, but a few have succeeded, newly industrialized economies (NIEs) in particular. Lin (2003) divides the structural strategies into two types: the Comparative-Advantage-Defying (CAD) strategy followed by many developing countries and the Comparative-Advantage-Following (CAF) strategy followed by NIEs. He argues that following the CAD strategy has a fixed negative effect on an economy’s growth over time. This paper however, which allows for the decadal changes in economic conditions and uses the OLS method on a sample of 105 countries and permanent observations of 49 countries, finds that structural strategies’ effects vary over time. Such a finding tempers conclusions from Lin (2003) as less evidence is found that CAD strategies lower growth