Trade in services and economic transformation: a new development policy priority

Working and discussion papers
February 2017
Bernard Hoekman and Dirk Willem te Velde

Services play a vital role in economic transformation and job creation in poor countries, but the effects are different from those in agriculture or manufacturing. While much of the discussion on economic transformation centres on transforming agriculture and moving into manufacturing, services are an under-explored component of economic transformation strategies.

This set of essays analyses the role of services, and especially trade in services, in economic transformation. The essays are divided into three sections: 

  • The first set of contributions is about understanding the role of services in economic transformation and what the donor community could do over the next few years to support increases in economy-wide productivity and employment by focusing more on services policies and the performance of services sectors.
  • The second section discusses the need to improve data on trade in services and where the focus should be.
  • The third section examines ways to support developing countries through trade agreements and preferential access to markets, and help poorer countries benefit from greater trade opportunities.