Linkage Dynamics and Natural Resources: Diversification and Catch-Up

Abstract

There is very broad consensus to the effect that resource-rich countries cannot rely on natural resource products and exports for development. The structural change that underpins development requires economic diversification such that ever-larger shares of labor are located in higher value-added activities in manufacturing and services. What is far more contentious is whether resource-based products provide a base from which higher value-added activities can develop, and if so, what policies are likely to be most effective in this regard.