2. A Regularity in Growth Patterns in Developing Countries: The Quantum and Composition

Mahmood examines the pattern of gross domestic product (GDP) growth across developing countries to gauge whether it is possible to distinguish between different income levels for least developed countries, lower- and middle-income countries, and emerging economies. While the quantum of GDP growth does not help distinguish consistently between these income groups, the composition of their GDP growth over the past third of a century clearly sets them apart. The share of manufacturing moves in lockstep up the income ladder in the long run. This striking empirical regularity in productive transformation may not imply a specific industrial policy for each developing country, but it is broadly indicative of what has worked in the past—and could be a major policy driver in the future.