The quest for inclusive sustainable development
: Economic growth, inequality and environmental interactions in the process of structural transformation of low-income countries

  • Seung Jin Baek

Student thesis: Doctoral ThesisPhD


This thesis examines the interaction between sustainable development and structural transformation as development policy goals and outcomes, with particular reference to low-income countries. This entails simultaneously examining two overlapping policy agendas, both aimed at moving away from an exclusive focus on economic growth. The first is a global normative agenda to promote sustainable development as a multi-dimensional concept, combining indicators of economic growth, income inequality and environmental sustainability. The second is a context-dependent national agenda to achieve structural transformation, incorporating geographical and sectoral changes in resource allocation and use in order to reduce dependence on the current international division of labour.

First, an overarching framework for integrated analysis of these two policy agendas, referred to as the Inclusive Sustainable Development (ISD) framework (Chapter 2), is developed. The focus is then narrowed to explore short and long-term interactions between economic growth and inequality by applying Granger causality tests to a balanced panel dataset for 143 countries (Chapter 3). A smaller dataset, comprising 29 countries in Africa, is then employed to investigate the correlations between a larger set of indicators of sustainable development and structural transformation (Chapter 4). The outcomes suggest that a compartmentalised approach—grow first, redistribute and clean up later—reduces the potential for long-run structural transformation. These results are further supported by the use of structural equation models to estimate trade-offs and synergies between the pursuit of economic growth, increased income equality, environmental sustainability, and indicators of structural transformation (Chapter 5). It emerges that a strategy of incorporating environmental initiatives into Africa’s structural transformation goals outperforms one that prioritises economic growth, while a strategy favouring social development goals may be most effective in the context of structural transformation. Key components of an integrated strategy include investment in renewable energy, the development of human capital and financial inclusion, which are examined in Chapter 6.

Overall, the outcomes of the thesis suggest that the structural transformation of low-income countries can benefit from an integrated approach to development planning, set out as a model for inclusive sustainable development. Realising this potential depends on sustained investment in national planning capability to integrate, prioritise and sequence policy interventions aimed at structural transformation in line with the three dimensions of inclusive sustainable development. The thesis is concluded with a summary of the research findings as well as suggestions for further investigation (Chapter 7).
Date of Award13 May 2020
Original languageEnglish
Awarding Institution
  • University of Bath
SupervisorJames Copestake (Supervisor) & Aurelie Charles (Supervisor)

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