Economic growth and structural change in Thailand, 1950-1995

The thesis focuses on the roles of factor accumulation, productivity growth and government policies on structural changes at the sectoral level. Chapter 1 examines factors determining the relative decline of agriculture. Conventional explanations stress demand factors (Engel effects), and more recently, supply factors (Rybczynski effects and technological change), and postulates that these cause a secular decline in agriculture. This chapter challenges this view. We show that sources of agricultural decline could shift over time. By separating the effects of government agricultural price interventions from domestic relative prices, we find that interventions are endogenous to structural change in agriculture and play different roles in the course of agricultural development.; Chapter 2 investigates three specific channels through which manufacturing growth is related to international trade and driven by scale economies: learning by doing, investment in human capital, and development of specialized inputs. This chapter employs aggregate manufacturing data and three-digit ISIC panel data to differentiate the sources of scale effects. We find no evidence at the aggregate level, but stronger evidence at the industry level of the relationship between productivity growth and the scale variable. Our findings indicate that positive and negative externalities are likely to cancel each other in the aggregate model, and may vary across industries.; Chapter 3 presents a general equilibrium model in which industrialization in a small open economy can be triggered by trade liberalization---in particular a reduction in the prices of foreign intermediate goods. The model is based on three important stylized facts. First, foreign capital and intermediate goods are technology-embodied. Second, human capital is a necessary input for producing the high-end products. In addition, there are spillovers from human capital accumulation. Third, industrial linkages are conductive to industrialization. Based on these three facts, the model shows that interactions between externalities resulting from human capital accumulation and industrial linkages (both backward and forward) under imperfect competition create a possibility for industrial take-off. Industrialization occurs simultaneously with human capital accumulation. Coordination failure and a concomitant lack of demand for skilled labor can result in an underdevelopment trap at low levels of industrialization.