Does structural change affect productivity growth in developing countries? Evidence from Côte d’Ivoire

Abstract

ABSTRACT The theoretical literature argues that the different course of structural change taken by developing countries, combined with the strong presence of the informal sector, should negatively affect their productivity growth. This article sheds light on the case of Côte d’Ivoire during the period 1991–2019. We first assess the level of structural transformation in Côte d’Ivoire and then examine its contribution to productivity growth between 1991 and 2019. To achieve this, we used the decomposition methods of de Vries et al. (2015) and Pesaran et al. (2001). The first approach shows that one fifth of this productivity growth is due to structural change. Second, a five-year analysis over the same period using the same approach shows that structural change even stalled productivity growth between 2001 and 2005. Furthermore, the short- and long-term analysis of structural change to productivity growth shows that structural change contributes significantly to productivity growth in the long term. Thus, the result don’t corroborate theoretical predictions.