10
Tales from the Development Frontier
specific actions built on successful experience in low-income countries. It accomplishes the following:
• • •
Identifies specific sectors as potential candidates for start-up Pinpoints constraints that have obstructed manufacturing in these sectors Highlights concrete reforms that can create opportunities for private domestic or foreign entrepreneurs to initiate light manufacturing operations in specially established industrial parks or districts
This approach builds on the work of Chenery (1979) and Hausmann, Rodrik, and Velasco (2005) who visualize development as a continuous process of specifying the binding constraints that limit growth, formulating and implementing policies to relax these constraints, securing modest improvements in performance, and then extending and renewing growth by identifying and pushing against the factors limiting expansion in the new environment. We consider this prescription for limited, sharply focused policy measures more effective because limited financial and human resources or rentseeking activities often prevent full implementation of national-level reforms. Our approach is also consistent with the new structural economics, which views economic development as a process that requires the continuous injection of improved technologies and upgrading of skills (Lin 2012). Following Chenery, our approach emphasizes that development begins somewhere, but not everywhere. In Africa, as in China, applying limited resources in funds and high-quality administrative personnel to implement sharply focused reforms holds the promise of initiating new clusters of production, employment, and, eventually, exports without first resolving economy-wide problems of land acquisition, utility services, skill shortages, administrative shortcomings, and the like. But why China? Because of its size and historical development, China is unique. Its development of light manufactures is of great interest for this reason alone. In today’s globalized world, any country introducing light manufactures must face competition from Chinese producers. As the newest example of industrialization