Structural Transformation and Productivity Growth in Cameroon

Abstract The object of this paper is to evaluate the contribution of structural transformation to the labour productivity growth in Cameroon over the period 1965 to 2015. To do this, we use a growth decomposition technique following the work of McMillan and Rodrik (2011) and De Vries et al. (2015). Our results show that structural transformation, viewed as a progressive reallocation of the workforce from sectors with low productivity to those with high productivity, has contributed little to the increase in labour productivity growth. It is actually the within component that seems to explain most of the productivity gains, while the between component that characterizes structural transformation has been rather weak. Even more, the dynamic share of this structural transformation was negative throughout the period covered by the study. Econometric estimates make it possible to identify economic growth (approximated by the GDP per capita), trade openness, exchange rate depreciation and the quality of the institutions, particularly the decrease of corruption, as factors having affected structural transformation and on which Cameroon should act with appropriate economic policies.