Another Look at the Export of Raw Materials and Economic Growth

Recent empirical evaluations of the economic consequences of specialization in the export of raw materials have been seriously hampered by inadequate conceptualization and measurement of the central variables. A scale is advanced to measure relative degree of processing of exports and it is shown that specializing in the export of goods with low levels of processing has a significant negative effect on economic growth. The broader results suggest that position in the world economy is an important determinant of the economic fate of nations.