The Role of Comparative Advantage and Endowments in Structural Transformation

In this chapter we discuss the role of country's given conditions and endowment structures according to two theoretical perspectives. While `pure' theories of trade have mainly seen specialization according to one's comparative advantages as the key route to development, we outline a `heretic' point of view on the role of technological learning and absolute advantages for structural transformation. Such a theory will provide useful guidance to interpret the eects of unbridled globalization and the role of natural resources vis-a-vis industrial and trade policies in shaping the process of structural change.