Despite widespread agreement among economists that labor-intensive manufacturing has contributed mightily to rapid development in China and other fast-growing economies, most developing countries have had little success in raising the share of manufacturing in production, employment, or exports....

Despite widespread agreement among economists that labor-intensive manufacturing has contributed mightily to rapid development in China and other fast-growing economies, most developing countries have had little success in raising the share of manufacturing in production, employment, or exports....

The literature has argued that developing countries are unable to adopt counter-cyclical monetary and fiscal policies due to financial imperfections and unfavorable politicaleconomy conditions. Using a world sample of 115 industrial and developing countries for 1984-2008, we find that the level...