RETHINKING THE GROWTH DIAGNOSTICS APPROACH: QUESTIONS FROM THE PRACTITIONERS

The growth diagnostics methodology pioneered by Hausmann et al. (2005) is becoming a key component of the toolkit for donor agencies to formulate their operational strategies. This paper aims at clarifying the primary objectives of the approach, and at highlighting some limitations for operational use. The key to benefiting from the full potential that this approach offers lies in a proper understanding of what it does. This requires being forewarned about the indiscriminate application of the approach to any developing country, irrespective of its circumstances, for it can lead to misguided conclusions.