Sources of Structural Change Within an Input-Output Analysis Framework: The Case of Kuwait 1983-1995

The state of Kuwait, like other developing countries, aims at diversifying its economy. This paper examines the sources of structural change as a means of diversification. An Input-output (I-O) decomposition analysis, among others, is used to cover the period 1983-1995. The results show that among these sources domestic demand plays a vital role, followed by export demand, import substitution, and technical change, respectively. Other indicators for testing structural change are used. These include: forward and backward linkages, and the share of consumer, intermediate, and investment activities in total manufacturing value added. The other two indicators also reveal modest structural change.