As developing countries pursue infrastructure projects, they should aim to address a combination of the pandemic, climate, inequality, and other crises with the right mix of economic and social infrastructure. To do this, governments must invest in a national infrastructure planning process, align planning with the SDGs, and prioritize sustainable infrastructure over infrastructure that does not put people and the planet first. There is no silver bullet for all the challenges; however, incremental changes based on innovative precedents can potentially make a difference on the ground. This paper proposes an analytical framework to consider these challenges and concludes with possible…

Economic development is associated with structural transformation and the increase of complexity of production and exports. This paper examines whether strategic diversification is required to increase economic complexity or whether market incentives would be sufficient to drive this process of catching-up. The paper applies empirical methods of the strand of the literature on economic complexity to examine how path dependency and the demand for potential new products affect economic diversification. It argues that strategic diversification is required in cases when demand factors are very likely to create incentives for diversification towards less complex products, which hinders the…

Economic diversification is very relevant for poorer developing countries to create jobs and foster economic development. That need has been recognized in key internationally agreed development goals. The empirical economic literature has identified several stylized facts about the pattern of diversification of economies, but the development of explanations for those patterns in general has been only loosely associated with economic theory on growth, trade, technology change and structural transformation. Making that connection is relevant because it could inform policymakers in developing countries in designing and implementing policies for promoting diversification. This paper presents…