Empirical structural-change analysts emphasize both domestic and international constraints on development. The domestic ones include economic constraints such as a country’s resource endowment and its physical and population size as well as institutional constraints such as government policies and objectives. International constraints on development include access to external capital, technology, and international trade. Differences in development level among developing countries are largely ascribed to these domestic and international constraints. However, it is the international constraints that make the transition of currently developing countries differ from that of now industrialized countries. To the extent that developing countries have access to the opportunities presented by the industrial countries as sources of capital, technology, and manufactured imports as well
as markets for exports, they can make the transition at an even faster rate than that
achieved by the industrial countries during the early periods of their economic development.
Thus, unlike the earlier stages model, the structural-change model recognizes
the fact that developing countries are part of a highly integrated international
system that can promote (as well as hinder) their development.