Developing countries' economies are a mish-mash, combining the productive with the unproductive, the First World with the Third. But why are some developing countries able to shift workers from low-productivity activities to higher-productivity sectors, whereas others have seen labor flowing in the opposite direction?
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CAMBRIDGE – One does not have to spend much time in developing countries to observe how their economies are a mish-mash, combining the productive with the unproductive, the First World with the Third. In the modern, more productive parts of the economy, productivity (while typically still low) is much closer to what we observe in the advanced countries.