CDP Background Paper No. 37

By Committee for Development Policy secretariat

Least developed countries (LDCs) are characterized by limited productive capacities, which constrains their efforts towards structural transformation and sustainable development. At the same time, the actual policy choices countries that have graduated or have made significant progress towards graduation from the LDC category provide a wide range of lessons other LDCs and the international community can learn from. Whereas countries can be on different pathways towards graduation, a diverse set of social, macroeconomic, financial, agricultural and industrial policies can be effective. However, good development governance is the key factor for successfully expanding productive capacity.