國際勞工組織（ILO）：發(fā)展中經(jīng)濟體的平臺工作：數(shù)字化能否推動結(jié)構(gòu)轉(zhuǎn)型

UNIVERSITYOFTHE

WITWATERSRAND,

JOHANNESBURG

SOUTHERNCENTREFOR

INEQUALITY

STUDIES

FUTUREOFWORK(ERS)

SCISWorkingPaperINumber63

Platformworkin

developingeconomies:

Candigitilisationdrive

structural

transformation?

SarahCookandUmaRani|Dec2023

International

Labour

Organization

Platformworkindevelopingeconomies:Candigitalisationdrivestructuraltransformation?

SarahCookandUmaRani

Abstract

Thispaperdiscussestheexpansionorpenetrationofdigitaleconomicactivityinthecontextofdevelopingeconomies,andwhatthismaymeanforeconomicorstructuraltransformationsforcountriesintheglobalSouth.Weaskwhatpossibilitiesnewjobsandformsofworkinthedigitaleconomyhold-inparticularplatformwork-fortheproductivetransformationofeconomiesinwaysthatcontributetoachievingthegoalsofhuman,inclusiveandsustainabledevelopment.Whataretheimpactsonworkandworkersinthisprocess?Thequestionofwhetheradigitaltransformation'canspurdevelopmentand,ifso,howandtowhosebenefit,dependsinlargepartonthenatureofemploymentcreated,andwhetherlabourcanmovetohigher-productivitysectorswhichraiseincomeswhilealsostrengtheningthecapacitytofinancepublicgoodsandservices,includingsocialprotection.Thispaperprovidesasynthesisofliteratureanddebates-conceptual,historicalandempirical-linkingworkinthedigitaleconomywithideasof'structuraltransformation'anddevelopment.Ouranalysisofhistoricalprocessesofstructuraltransformationandoftheconditionsofworkassociatedwithcontemporarydigitalplatformspointstoarangeofobstaclestodevelopmentand,inparticular,thebreakdownoflinksbetweenskills,productivity,valueandwages,limitedcapacityofstatestoinvestinrelevantinfrastructure,andtheconcentrationofcapitalwithaccesstoaglobalsupplyoflabour.Weconcludebyconsideringpolicyactionsthatwouldbeneededtodirectdigitaleconomic

transformationtowardssustainable,fairandinclusivedevelopment.

Muchofthedebateontheimpactofdigitaltechnologiesontheworldofwork(ers)hasbeenspeculativeand,wheresubstantiatedbyempiricalevidence,ithasstemmedprimarilyfromtheglobalNorth'

https://www.wits.ac.za/scis/research-projects/digital-technologies-the-future-of-workers-and-inequality/

).

Keywords:structuraltransformation,developingeconomies,platformwork,digitalisation,workingconditions,

productivity,skills,gender

Introduction

Thispaperdiscussesthepossibilitiesfor'development'indevelopingeconomiesunderconditionswherethepenetrationofdigitaltechnologiesbecomes,orisassumedtobe,aprimedriverofgrowthandemployment.Whatdevelopmentopportunitiesdodigitaljobsoffer,andwhatdotheymeanforthenatureofworkandconditionsofworkers,and,byextension,forlocalornationaldevelopmentpathways?Digitaljobsbroadlyencompassworkusingnewinformationandcommunicationtechnologies,artificialintelligence(AI)andautomation,whetherwithinoroutsidetheinformationandcommunicationtechnologies(ICT)sector.Inthispaper,whilerecognisingtheimportanceofautomationanddigitisationinthewiderdigitaltransformationofeconomies,wefocusprimarilyonworkundertakenonormediatedthroughdigitalplatforms,includinglocation-basedwork(suchasdeliverycouriersanddrivers),ortaskscarriedoutonweb-basedplatforms(from"click-farms"tomachinetrainingthroughbusinessprocessoutsourcing(BPO)andprofessionalservicessuchaslegalorsoftwareprogramming).Whilethereisindeedgrowingevidencethatjobsusingdigitaltechnologiesarecontributingtoeconomictransformation,includinginlowandlowermiddle-incomeeconomies,thequestionremainsastowhether,howandunderwhatcircumstancesthey

areleadingto“development”asvariouslyconceivedandmeasured.

Thesequestionsaredrivenbyaconcernthatdominantanalysesof"digitaltransformation"havemarginalisedthecriticalroleplayedbyemploymentandlabourintheprocessofdevelopmentforlower-incomeeconomies.Inparticular,wenoteasurprisinglackofattentionwithinthefieldofdevelopmenteconomics,whethertheoreticalorempirical,tothelinkbetweendigitaldevelopmentandstructuraltransformation'aswellasalimitedfocusonissuesofemploymentandconditionsofworkfromadevelopingcountryorglobalSouthperspective.Thisisdespiteexcessiveinequalityandjoblessnessinmanysucheconomies.Wherethedevelopmentalimplicationsofdigitaltechnologiesarediscussed,theemphasistendstobeontheirpotentialtoenhanceproductivityandefficiencywithanassumedlinktogrowthanddevelopment,ratherthanonoutcomessuchasemploymentcreation,higherwages

and“decent”work.

ManyanalystsparticularlyfromtheglobalNorthpredictthatadigitalFourthIndustrialRevolutionwillleadtomassivejoblosses(FreyandOsborne,2017),withimpactsvaryingbycountry,orthatautomationwillleadtochangeswithinoccupations,inparticulartheirbreakdownintospecifictasks(Arntz,GregoryandZierahn,2019;ChangandHuynh,2016;FreyandRahbari,2016;NedelkoskaandQuintini,2018).?Thedebateinrelationtodevelopingcountriesoftenprojectsamoreoptimisticview:thatdigitalisationwillcreatejobs,raiseproductivityandcompetitiveness,thusgeneratinggrowthandenablingcountriestomoveupthevaluechain.Whatisneeded,itis

argued,isforcountriestomaketherequiredinvestmentsindigitalinfrastructureandskillswhichcanhelpthemto

1Whilestructuraltransformationhastraditionallybeenanimportantconcernofdevelopmenteconomics,shiftsinthefieldhaveledtotheneglectofsuchquestions,withafocusinsteadatthemicro-level.ExceptionsarefoundintheworkofscholarssuchasDaniRodrikandHa-JoonChang.Relevantresearchoccursacrossanumberofotherdisciplinesandfieldsincludinginformationtechnology,communications,businessandmanagement(seeforexampleFuetal.(2021a,b)andMatthessandKunkel(2020).EconomistsintheglobalNorth(particularlyUSAandEurope)approachquestionsaboutemploymentandproductivityindigitallabourfromanindustrialisedeconomyperspectivewithdifferentconcerns.

2Manyanalystsareconcernedwithemploymentimplications(whetherjobreplacement,taskificationorotherimpacts),butempiricalworklargelydrawsondatafromtheglobalNorth(forexample,BrynjolfssonandMcAfee,2014).Limiteddataisavailabletoanswerthesequestionsinmanydevelopingcountries.

“catchup”-orevento“l(fā)eapfrog”-stagesofgrowth,andthusdrivethestructuraltransformationoftheireconomiestohigherproductivityandwelfare.UnitedNationsIndustrialDevelopmentOrganization(UNIDO),forexample,writesthat“Technologiessuchasarificialinteligence,bigdataanddronescanhelpenterprisesinLDCsleastdevelopedcountries]enhancetheirproductivityandcompetitiveness,andmoveupthevaluechainladderinagriculture,industry,andtheservicessector.Similarly,digitalgoodsandservicestradeenhancestheopportunityfor

smallandmediumenterprisesSMEs)toparticipateinglobaltradeandenhancetheirfinancialinclusion.”

TheseoptimisticnarrativesofadigitalFourthIndustrialRevolutiontendtofocuscentrallyontherolethattechnologyplaysinraisingproductivityanddrivingtransformationsofeconomyandsociety,underemphasisingthequestionofwhetheradigitaltransformationcanchangethestructureofeconomiesinwaysthatleadto“development”,4forexamplethroughdecentworkingconditionsandimprovementsinlivelihoodsecurity.Evidencetodatesuggeststhat,infact,aggregatelabourproductivityhasdeceleratedoverthepastdecadesinOECD(OrganizationforEconomicCooperationandDevelopment)countries,includingtheUnitedStates,andhasdeclinedindevelopingeconomies(Brynjolfsson,RockandSyverson,2019).Inaddition,latesttechnologiesareconcentratedamongasmallshareoffirmsinadvancedeconomies(Baueretal.,2020;Brynjolfsson,RockandSyverson,2019;Dieppe,2020;Tambeetal.,2020),whilefirmsinlow-incomecountriesgenerallydonothaveaccess

tosuchtechnologiesorthecapacitytobenefitfromthem.

DrawingontheexperienceofcountriesandworkersintheglobalSouth,weexploretheevidenceforandlimitationsofsuchanarrative,intermsofboththekindofemploymentandconditionsofworkgenerated,anddriversofgrowthanddevelopmentmorebroadly.Bywayofbackground,wenotethatanyprocessofdigitaltransformationtakesplacewithinabroaderecosystemassociatedwiththeproductionanduseoftechnologies.Thiswouldincludetheminingofessentialmetalsaskeyinputsintodigitaltechnologies,themanufactureofsuchtechnologiesanddevelopmentofassociatedinfrastructure,theautomationordigitalisationofindustrialproductionprocessesandothertraditionalworksectorssuchasfinance,e-commerceandservices,andthemanagementofelectronicwaste(UNCTAD,forthcoming).Thisbroaderecosystemthuslinksalsotoprominentconcernsaboutresourceuse,environmentalsustainabilityandchangingconsumptionpatterns,allofwhichhaveimportantimplicationsforthe

positionofworkandemploymentwithinsustainableandinclusiveeconomicdevelopmentstrategies.

Inaddition,digitalpenetrationindevelopingcountriesoftentakesplaceagainstabackgroundofrelativelyweakstateandinstitutionalcapacity,limitedfiscalresources,excessivelevelsofinequalityandun-orunder-employment,unfavourabletermsofglobalsupplychainintegrationandthegrowingfinancialisationofeconomicactivity.Withinsuchcontexts,Covid-19furtherintensifiedtherapidspreadofdigitaltechnologieswhilemakingvisibletheoftenproblematicconsequencesforworkersandvariousformsofemployment.Theseconsequencesweresometimesdisguisedbehindnarrativesofemployment-creatingopportunitiesandprogresssurroundingthe"digitalrevolution"

(ILO,2021).

3See

/news/technology-driver-structural-transformation-ldcsAccessed:20/01/2023

.

4Whilethemeaningofdevelopmentremainscontested,ithasatcoreanirreduciblegoalofimprovinglivingconditionsofpeople'(Nayyar,2003:62).Suchideaswerecentraltoearlythinkingaboutstructuraltransformation.

Againstthisbackground,thepapercriticallyexaminestheideaof“structuraltransformation”andexploresthepossibilitiesofa“digitaltransformation”generatingsuccessfulstructuralchangeundercontemporarydevelopmentconditions.Bystructuraltransformationwerefertochangesinthesectoralcompositionofproduction,employment,demandandtrade,aswellasthedistributionofincomes,reductioninpoverty,creationofstableandsecurejobs(withbetterworkingconditions),andchangesinsocialandeconomicinstitutionsthatcanbringaboutaproductivetransformationofsociety.Examiningthedigitaleconomywithinthisbroaderunderstandingofstructuraltransformationshouldhelpustoidentifyandassesswhatopportunitiesdigitaltransformationofferstodevelopingcountries,andwhatactionswillbeneededtoshapethesetowardssustainable,fairandinclusivedevelopment.Dothetraditional“stylisedfacts”ofstructuraltransformation-fromagriculturalsubsistencetoindustrialandservicesectoremploymentwithincreasesinproductivityandenhancedwelfare-anylongerapproximatethedevelopmentpossibiitiesortrajcectoriesavailabletoeconomiesintheglobalSouth?Dosectoralororganisationalchangesinducedbydigitalisationhavethecapacitytocreateemployment,enhanceproductivity,raisewagesandcreatedecentjobsassociatedwith"development"?Whatistheroleofskillsinthisprocess?Whatcanbetheroleoftradeunionsornewformsofworkerorganisingandpowerininfluencinggovernmentpoliciesandfirmbehaviour,ensuringthattheycontributetoaproductivetransformationforthesocietyandeconomy?Andhowdoestheexistinglandscapeofdevelopmentandinequalitydeterminethepossibilitiesfor,andshapetheprocess

of,digitalstructuraltransformationas“development”?

Thispaperprovidesasynthesisofexistingresearch,evidenceanddebates-conceptual,historicalandempirical-underpinningideasof“structuraltransformation”anddevelopment,andthedigitalisationoftheeconomy.Ourpurposeistoexplorelinksbetweenthesedebatesfromtheperspectiveofworkandworkers,withafocusonemploymentcreationandconditionsofwork.Section2providesabriefsummaryofkeystrandsintheliteratureonstructuraltransformation-frompost-wardevelopmentmodelstothesuccessfulstructuraltransformationofdevelopmentalstateslargelyinEastAsia.Thisisfollowedbythestalledtransformationsfollowingtherisetodominanceof“neo-liberal”economicpoliciesandglobalisation,andfacilitatedbytherevolutionininformationtechnologies.Section3examineschangingdebatesabouttheroleoftechnologyineconomicdevelopment,bothintheory(fromold“neoclassical”tonew“endogenous”growthmodels)andinpracticeduringtheperiodoftechnologicalchangeassociatedwith"ICTforDevelopment".Section4turnstotherecentphaseofdigitalisation.Wedrawonthestylisedfactsconcerningskillsandproductivity,investmentinhumancapitalandinfrastructure,andtheroleofcapitalandtechnologyinassessinghowdigitalisationand,specifically,workthroughplatforms,hasaffectedtheconditionsofworkandworkers.Section5assessestheextenttowhichkeyfeaturesorstylisedfactsofstructuraltransformationarepresentinthecurrentshiftstowardsadigitaleconomy,andsuggestssomeofthekeypolicies,institutionalarrangementsandregulatorystepsnecessarytolinkdigitalisationtostructuraltransformationasdevelopment.Inconclusion,wepointtothekeypolicyquestionsthatneedtobeaddressedifkeybarriersto

productivetransformationsaretobeovercome.

Structuraltransformation,labouranddevelopment

Structuraltransformationandthesectoralreallocationoflabour

Structuraltransformationrefers,inparticular,tochangesinthestructureofeconomiesassociatedwitheconomicgrowthanddevelopment,withthemainoutcomebeingthereallocationoflabourfromagriculturetowardsmoreproductiveeconomicsectors(manufacturingandservices).Keyfeatures-oftentermed“stylisedfacts”-includehigherlabourproductivity/returnstolabourthroughsectoralandspatialshifts;anincreaseinskillsandhumancapital,leadingtoimprovedincomesandwell-being;ashifttoformaljobsandinstitutionalarrangementsforsocialsecurity;andmoreequitablegrowthanddevelopment.Whatdrivesstructuraltransformationisthesubjectofgreaterdebate,butwouldgenerallyincludesectoralchange(possiblydrivenbytechnology)towardshigherproductivityactivities;changingtermsoftrade;changingpreferences(consumerdemand)asincomesincrease;andskill-biasedtechnologicalchangefollowinghigherinvestmentineducationandskills.Forthepurposeofthispaper,thekeyfeatureofconcernisthereallocationoflabourbetweensectors-particularlywhenlinkedtomorerecent

technologicalchange-andtheimplicationsforproductivity,wagesorincomesandwelfare.

WritingafterthesecondWorldWar,earlydevelopmenteconomiststheorisedthatlabourwouldfollowmoreadvancedeconomiesinmovingfromlow-productivityactivities(subsistenceagriculture)tohigher-productivitymanufacturingandthentoservices(Lewis,1954;SolowandSwann,1956).Theintersectoralshiftoflabourfromlow-productivitytohigher-productivitysectorswouldgenerategrowth,evenintheabsenceofanyincreaseinproductivitywithinsectors.Buildingontheearlier(one-sector)growthmodelofHarrod-Domar,capitalaccumulation,savingsandinvestmentwereseenaskeystounlockinggrowthpotential,withtechnologyandchangesinproductivitytakenasexogenous.Ontheassumptionthatcapitalwouldflowtonewandmoreproductiveinvestmentopportunities,labourwould,inturn,movetotheresultingnewandmoreproductivejobs.Investment

opportunitieswouldreflectanation'scomparativeadvantageandleadcountriestobenefitfromgainsthroughtrade.

InthepoliticalcontextoftheColdWar,Rostow(1960)infusedthesegrowthmodelswithwesternassumptionsof“modernisation”andculturalchangeoccurringthroughindustrialisation.Rostowarguedthatdevelopingcountrieswouldneedtopassthroughalinearorsequentialsetof“stagesofgrowth”inordertoachievethetransformationexperiencedbythethen-industrialisedcountries.Risingpercapitaincomeswouldbeassociatedwithprogresstowards“modernisation”(Fine,2003:202).Increasingproductivityandsavings-providingthecapitalnecessaryforinvestment-andchangesindemandwerethuslinkedtoprocessesofculturalorbehaviouralchange.5Furthermore,aslabourmovedfrompredominantlylow-incomesubsistenceagriculturetohigher-productivityskilledmanufacturingandthenservicejobs,demandwouldincreaseforhigherlevelsofeducationorinvestmentin

whatlatercametobetermed“humancapital?6-thereturnstowhichwouldgenerateyethigherincomesandwell-

5Finealsonotestheassumptionthat“increasesinproductivity,increasingsavingrates,developmentofindustry,andsoon,woulddependuponculturalchanges,notleastentrepreneurialspiritandtheculturalembracingofmarketandwestern

norms”(2003:203).

6Inthe1960s,Schulz(alongwithothereconomistssuchasBecker)developedthetheorythat"humancapital"wasanecessarycomplementtophysicalcapitalanditsabsenceakeyconstrainttodevelopment.

being.Associatedwiththeseshiftswouldbethe“formalisation”ofemployment,andtheevolutionofnew

institutionalarrangements,includingtheextensionofsocialsecurity.

However,itwassoonrealisedthattherewasacriticalmacroeconomicdistinctioninthenatureofunemploymentbetweendevelopedanddevelopingeconomies(Kalecki,1976).Indevelopedeconomies,"unemploymentwaslinkedtoinadequacyofeffectivedemand;indevelopingeconomies,unemployment(under-employment)wasseenasstructural,resultingfrom.…shortageofcapitalequipmentandsupplyofnecessities"(GhoshandRani,2021:2).Inaddition,itbecameclearthattheemploymentproblemcouldnotbesolvedwiththegrowthoftheindustrialsectoralone.Thespatialandsectoralreallocationoflabourwasnotcostless:theso-called"reservearmy"ofrurallabourwasbeingabsorbedintourbanmanufacturingandservicejobsatlowmarginalwages-withthesurplusgeneratedinagriculturesupportingtheconsumptionofnon-agriculturalgoods,thuseffectivelyprovidinganinitial“subsidy”tocapitalanda“safetynet”forworkersmigratingfromthecountryside.RedistributivepoliciesorinterventionstoensuretheprovisionofwhattheInternationalLabourOrganization(ILO)termed"basicneeds"wouldhavetobeintegratedaspartofanydevelopmentstrategyinordertoensureafairdistributionofincomeand

productiveemployment(ILO,2009;IIO,1961).

Atthesametime,otherstructuraleconomistsanddependencytheoristsarguedthatthehistoricalevidencerefutedtheviewofeconomicdevelopmentasproceedingthrough"stages"withauniformpatternlinkedtoariseinincomepercapita.Theyfocusedinsteadonthedependentnatureofcore-peripheryrelationswhichcreateddeterioratingtermsoftradeand“underdevelopment”ofcolonies.CountriesinLatinAmericaandSouth-EastAsiaturnedto“importsubstitutionindustrialisation”(ISI)tobuildupdomesticcapabilitiesandinvestintheircapitalgoodsindustry.InthecaseoftheEastAsianeconomies,thesepoliciesformedanimportantbasisfortheirsubsequent

export-ledgrowth

Structuraltransformationindevelopmentalstates

Despitecontestationabouttheoriesofgrowth,the"stylisedfact"ofstructuraltransformationrelatingtotheinverserelationshipbetweentheshareofemploymentinagricultureandpercapitaGDPhasprovedremarkablyrobustforthosecountrieswhichsucceededinmovingtomiddle-orevenhigher-incomestatus.Inpractice,however,onlyasmallgroupofeconomiessincethemid-twentiethcenturyhavesuccessfullymanagedsuchatransformation,andthesewereprincipallylocatedinEastandSouth-EastAsia.InthoseLatinAmericanandSouthAsiancountrieswheretherewasinitiallyarapidexpansionofthemanufacturingsectorassociatedwithISI,progresssubsequently

stalledandcreatedaduallabourmarket(GhoshandRani,2021).

Countriesthatsucceededinachievingrapidgrowthinthepost-wardecadeswerelargelythosethatsharedintheEastAsian“exportled”development“miracle”ofthe1960sand1970s.MuchhasbeenwrittenaboutthedevelopmentpathwaysoftheNICs(newlyindustrialisedcountries)andmuchcontroversyhasbeengeneratedoverthedriversoftheirsuccess.Whatisclearisthatcountriesthatsucceededwithsuchatransformationdidsothroughheterogeneouseconomicpathwaysandundervariedpolicyregimes.TheEastAsian"miracleeconomies"owed

theirstructuraltransformationandrapidindustrialgrowth,inpart,toasuccessfultransitionfromimport

substitutionindustrialisation,throughwhichtheybuilttheircapitalgoodsindustriesandinnovationcapacity,toanexport-orientedindustrialstrategy.Despiteeffortstoclaimtheirsuccessasmarket-led(WorldBank,1993),rigorousscholarshiphasshownthatactivedevelopmentalstatesintervenedwitharangeof“selective”industrialandcomplementarysocialpoliciestoshapethisdevelopmenttrajectory(see,forexample,Amsden,1989;Amsdenetal.,2012;Chang,2002).Whatemergesfromtheworkoftheseandotherauthors(forexample,Wade's1996critiqueoftheWorldBank'sEastAsianMiraclereport)isthecriticalroleplayedbythestateindirectingcapitalthrough“selective”industrialpolicies,inducing“patientlabour”throughrepressedwagedemandsandconsumption,whilealsoensuring“patientcapital”thatinvestedforthelongterminproductivecapacitiesaswellasinhumancapitalandsocialinfrastructure.Socialpoliciesinthesestateshadaproductivistorientation,“helpinglosers”while

enhancingthelabour,educationandskillsneededforindustrialisationandinnovation.

So,whilesomebroadstylisedfactsofstructuraltransformationheld,thisoccurredthroughtheoperationofquitespecificpolicyregimesandinstitutionalarrangements.Wheredevelopmentdidoccur,thestateplayedakeyroleinregulatingwagesandworkingconditions,andholdingcapitaltoaccount,whileworkerorganisingsubsequentlybecameanessentialelementofstrugglestoimprovewagesandworkingconditionsandclaimlabourandsocial

rights.

Structuraltransformationunderglobalisation:Stalledindustrialisationandtheshifttoservices

Manydevelopingcountries,bycontrast,failedtoundergoaproductivestructuraltransformationandfoundthemselvesinasituationofstalledindustrialisation,orwhatRodrik(2015)morerecentlytermed"prematuredeindustrialisation”,withexcessivelyhighratesofunemployment,workthatispredominantlyclassifiedasinformal,“wageless”growth,inadequatesocialprotectionandinsufficientsavingsandinvestment.Anumberoffactorshelptoexplainthisfailure.Bhaduri(1989)arguesthatthefailuretomovelabourfromagriculturetotheindustrialsectorinmanydevelopingeconomies,inpart,reflectsinequalityinlandownershipandotherresources.Thispromptedamassiveoutmigrationofagriculturalworkersseekingworkfromruralareastourbanareas,wheretheymovedintolow-skilledindustrialorserviceactivitiesasasurvivalstrategy.Aspatialreallocationoflabourwasaccompaniedbyasectoralshift,butnottohigher-productivitymanufacturing.Instead,themovewasfromagriculturetolow-skilledandlow-incomeserviceactivities.Lookingatthepost-1990periodofglobalisation,McMillan,RodrikandVerdusco-Gallo(2014)similarlyclaimthatstructuralchangeinAfricaneconomieshasmovedlabourintolow-

income,informalemployment.

Otherexplanationsrelatetothebroadercontextoftheriseofneoliberalisminwesterneconomies,andassociatedpoliciesthatfostermarketliberalisationandglobalintegration.Countriesattemptingastructuraltransformationfromthe1980sthusdidsounderverydifferentcircumstancestothoseanalysedbyearlydevelopmenteconomistsorthatexperiencedbytheNICs.First,theriseofneoliberalismasadominantideologyemphasisingmarket-ledgrowthledtothestatebeingviewedasaninefficientbarriertoeconomictransformation.AsNayyar(2003:62)noted,whiletheearlydevelopmentliterature"emphasisedeconomicgrowthandcapitalaccumulationatamacrolevel;contemporaryliteratureondevelopmentstresseseconomicefficiencyandproductivityincreasesatamicro

level”inkeepingwithaneo-liberalemphasisonsupplysidepoliciesandtheprimacyofmarkets.AsNayyaralso

argues,thisreflectsawiderfailureof“mainstreameconomics”todistinguishbetweenmeans(productivity,

efficiency)andends(suchasfullemploymentorpovertyeradication).

Second,whilestructuraltransformationwasconceptualised,policiesimplementedandtheirresultsmeasuredatanationallevel,theroleofthenationstateinthisperiodwaschallengedbyboththedominantmarket-ledideologyandbyglobalisation.Thisphaseofglobalisationunderminedthecapacityofstatesinrelationtoglobalcapitalandinrelationtoadvancedeconomiesandtheinternationalfinancialinstitutions(IFIs).Capitalbecameincreasinglymobilewhilelabourwasconstrained.Capitalflightlimitedwhatcouldbereinvestedtocontributetonationaldevelopment.Stateshadfewerresourcesandlesspolicyspacetodevelopnationalandindustrialpoliciesinlinewiththeirownneeds,withtheirpoliciesdisciplinedbythestructuraladjustmentandstabilisationprogrammesthrough

whichtheIFIsimposedneoliberalism.

Third,tradeandmarketliberalisationdidnotdelivertheexpectedbenefitsformanydevelopingcountries.Intheory,countriesthatliberalise