The Drivers of Structural Change

The main goal of this paper is to provide an integrated survey of the literature devoted to identifying the drivers of structural change, broadly defined as the process of reallocation of economic activity across the three broad sectors agriculture, manufacturing and services. Using the GGDC 10-Sector Database, this paper first presents the empirical facts associated with structural change in different regions of the world – i.e. Europe and the USA, Asia, Latin America, and Africa – then reviews four determinants of structural change: (i) changes in income, (ii) changes in relative (sectoral) prices, (iii) changes in input-output linkages and (iv) changes in comparative advantage(s) via globalization and trade