The failure of Algeria’s industrialization strategy, 1967–1989: a new structural economics perspective




Industrialization, new structural economics, economic growth, Algeria


Following the theoretical framework of New Structural Economics, this article attempts to explain why Algeria’s industrialization strategy failed over the period 1967–1989. Based on this approach, this paper shows that the overdevelopment of a big push industrialization strategy in Algeria since independence, which prioritized capital-intensive heavy industry, violates the comparative advantage principle identified by its factor endowments and gives rise to domestic market distortions and the misallocation of scarce resources. Simultaneously, to scaffold such a development mode, the Algerian government put forth an organic yet deeply distorted system. We conclude that the experience engendered serious weaknesses in Algeria’s industrial structure and planning, and it resulted in an unbalanced economic structure. Thus, Algeria’s industrialization strategy was disappointing in terms of economic outcomes and impact. This failure is often perceived as one of the main origins of the political, social and economic crisis faced by the country for more than a decade. Our findings suggest that the redesign of growth and industrialization strategies should better reflect Algeria’s endowments structure and level of development. Indeed, consistency of a broad-based and industry-based economy with its comparative advantage is one of the best ways to achieve high sustainable economic growth in Algeria.


Download data is not yet available.


Begga, Chérif, and Abdelhamid Merghit .2014,’Attempts to Industrial Reforms in Algeria: Do they fit the Logic of Globalization?', Topics in Middle Eastern and African Economies, 16: 96-113.

Benachenhou, Ahmed .1993. ’Algeria’. In Technological Transformation in the Third World: Volume II Africa, edited by Surendra Patel, 1-94. New York: United Nations University.

Bennoune, Mahfoud.1988. The Making of Contemporary Algeria, 1830-1987. Colonial Upheavals and Post-Independence Development. Cambridge: Cambridge University Press.

Bernis (de), Gérard. 1966. ’Les progrès des concepts économiques conditionnent les progrès de la mesure. Sur un nouveau livre de François Perroux’, Tiers Monde, 26: 395-408.

Bernis (de), Gérard. 1971. ’Les Industries Industrialisantes et les Options Algériennes’, Tiers Monde, 47: 530-570.

Boucetta, Samia. 2016. ’Identity and Hydrocarbons in Algeria’. In Algeria Modern: From Opacity to Complexity, edited by Luis Martinez, and Rasmus Boserup, 42-70. Oxford: Oxford University Press.

Das, Dilip. 2015. An Enquiry into the Asian Growth Model. London: Palgrave Macmillan.

Dutt, Amitava. 2019. ‘Structuralists, Structures, and Economic Development’. In The Palgrave Handbook of Development Economics: Critical Reflections on Globalisation and Development?, edited by Machiko Nissanke and José Antonio Ocampo, 109-141. London: Palgrave Macmillan.

Jomo, Sundaram. 2019. ‘What Should Africa Learn from East Asian Development?’ In Quality of Growth in Africa, edited by Ravi Kanbur, Akbar Noman and Joseph Stiglitz, 146-176. New York: Columbia University Press.

Ju, Jiandong. Lin, Justin, and Yong Wang. 2015. ’Endowment Structures, Industrial Dynamics, and Economic Growth’, Journal of Monetary Economics, 76: 244–263.

Haouas, Amine. Anis Ochi, and Mohammed Labidi. 2021. ’Sources of Algeria’s Economic Growth, 1979-2019: An Augmented Growth Accounting Framework and Growth Regression Method’, Regional Science Policy and Practice, 13:1-19.

Hill, Jonathan. 2009. Identity in Algerian politics: The legacy of colonial rule. Colorado: Lynne Rienner Publishers.

Hirschman, Albert. 1958. The Strategy of Economic Development. New Haven, Conn.: Yale University Press.

Hobday, Mike. 2013. ’Learning from Asia’s Success: Beyond Simplistic "Lesson-Making"'. In Pathways to Industrialization in the Twenty-First Century New Challenges and Emerging Paradigms, edited by Adam Szirmai, Wim Naudé and Ludovico Alcorta, 131-154. Oxford: Oxford University Press.

Gereffi, Gary. 1990. ’Paths of Industrialization: An Overview’. In Manufacturing Miracles Paths of Industrialization in Latin America and East Asia, edited by Gary Gereffi and David Wayman, 3-31. Princeton, NJ: Princeton University Press.

Kim, Jongil. 2014. ‘Designing Industrial Development Strategy for Next Five-year Plan.’ In Knowledge Sharing Project with Algeria: Policy Consultation for Securing Fiscal Sustainability and Stability in Algeria. Korea Development Institute.

Laouisset, Djamel Eddine. 2011. The Algerian steel industry growth decade: 1968-1978. Hauppauge NY: Nova Science Publishers.

Lawless, Richard. 1984. ’Algeria: The Contradictions of Rapid Industrialization’. In North Africa: Contemporary Politics and Economic Development, edited by Richard Lawless and Allan Findlay, 153-90. New York: Croom Helms.

Lin, Justin. 2009. Economic Development and Transition: Thought, Strategy, and Viability. Cambridge: Cambridge University Press.

Lin, Justin. 2012a. New structural economics. A framework for rethinking development and policy. Washington, DC: World Bank.

Lin, Justin. 2012b. The Quest for Prosperity: How Developing Economies Can Take Off. Princeton, NJ: Princeton University Press.

Lin, Justin. 2013. ’From Flying Geese to Leading Dragons: New Opportunities and Strategies for Structural Transformation in Developing Countries’. In The Industrial Policy Revolution II: Africa in the 21st Century, edited by Joseph Stiglitz, Justin Lin and Surendra Patel, 50–72. New York: Palgrave Macmillan.

Lin, Justin. 2017. ’Industrial Policies for Avoiding the Middle-income Trap: A New Structural Economics Perspective’, Journal of Chinese Economic and Business Studies, 15: 5–18.

Lin, Justin. 2021. ’Economic Development, Transition, and New Structural Economics’. In The Palgrave Handbook of Comparative Economics, edited by Elodie Douarin and Oleh Havrylyshyn, 545–560. New York: Palgrave Macmillan.

Lin, Justin, and Yong Wang. 2017. Going Beyond Aid: Development Cooperation for Structural Transformation. Cambridge: Cambridge University Press.

Lin, Justin and Jun Zhang. 2019. ’China: Learning to Catch up in a Globalized World’. In How Nations Learn Technological Learning, Industrial Policy, and Catch-up, edited by Arkebe Oqubay and Kenichi Ohno, 149-172. Oxford: Oxford University Press.

Lin, Justin, and Ha-Joon Chang. 2009. ’Should industrial policy in developing countries conform to comparative advantage or defy it? A debate between Justin Lin and Ha-Joon Chang’, Development Policy Review, 27:483-502.

Lowi, Miriam. 2009. Oil Wealth and the Poverty of Politics: Algeria Compared. Cambridge: Cambridge University Press.

Magland, Francesco and Beatrice Rangel-Mantilla. 1982. ’Quo vadis, Algeria? Evaluation of a development model’, Rivista di Studi Politici Internazionali, 49:179-206.

Metz, Helen. 1994. Algeria: a country study, 5th ed. Washington DC: Library of Congress.

Naughton, Barry. 2018. The Chinese economy: adaptation and growth. 2nd ed. Cambridge, MA : MIT Press.

Perroux, François.1963. Problèmes de l'Algérie Indépendante. Paris: Presses Universitaires de France.

Office Nationale des Statistiques (ONS), Statistical Retrospective (1962 – 2011).

Rosenstein-Rodan, Paul. 1943. ’Problems of industrialization of Eastern and South-Eastern Europe’, Economic Journal, 53: 202–211.

Ruedy, John .2005. Modern Algeria: the origins and development of a nation. 2nd ed. Bloomington, IN: Indiana University Press.

Saad, Mohammed, Hakim Meliani, and Mahfoud Benosman. 2004. ’The Tortuous and Uncompleted Privatisation Process in Algeria’. In Transition and Development in Algeria: Economic, Social, and Cultural Challenges, edited by Margaret Majumdar and Mohammed Saad, 17-28. UK : Intellect TM.

Sid Ahmed, Abdelkader. 1990. Économie de l'industrialisation à partir des ressources naturelles. Paris: Publisud.

Stiglitz, Joseph. 2021. ’From Manufacturing-Led Export Growth to a Twenty-First Century Inclusive Growth Strategy: Explaining the Demise of a Successful Growth Model and What to Do about It’. In Inequality in the Developing World, edited by Carlos Gradín, Murray Leibbrandt and Finn Tarp, 287-318. Oxford : Oxford University Press.

Talahite, Fatiha. 2016. ’Désindustrialisation et industrialisation en Algérie. Le rocher de Sisyphe’, Outre-Terre, 2 :130-151.

Talahite, Fatiha. 2018. 'Industrialisation de l’Algérie : l’obstacle des droits de propriété'. Afrique contemporaine, 266:131-150.

Temmar, Hamid. 2015. L’économie de l’Algérie : Les strategies de développement. Alger: OPU.

Wade, Robert. 1990. Governing the Market: Economic Theory and the Role of the Government in East Asia Industrialization. Princeton: Princeton University Press.

World Bank Group. (n.d.). World Bank Open Data [Data set]. (

Xiaoyang, Tang .2019. ‘New Structural Economics: A first attempt at theoretical reflections on China–Africa engagement and its limitations’. In New Directions in Africa–China Studies, edited by Chris Alden and Daniel Large, 290-297. London: Routledge.

Yu, Miaojie. 2020. Trade Openness and China’s Economic Development. London: Routledge.

Zhang, Qizi, and Hao Li. 2018. ‘Industrial Policy Design’. In Transforming Economic Growth and China’s Industrial Upgrading, edited by Qizi Zhang, 179-196. Berlin: Springer.

Zoubir, Yahia, and Ahmed Aghrout. 2012. ’Algeria’s Path to Reform: Authentic Change?’ Middle East Policy, 19: 66-83.




How to Cite

Haouas, Amine, and Justin Yifu Lin. 2024. “The Failure of Algeria’s Industrialization Strategy, 1967–1989: A New Structural Economics Perspective”. Revista De Historia Industrial — Industrial History Review 33 (90):11-40.