'Buyer Beware': A Case Study of How to Assess the Reliability of Policy Advice.

This article examines the tension between the observed structural change in developing countries since the end of the Cold War—characterized by "servicisation," or growth in the service sector—and the longstanding policy advice emphasizing industrialisation. It argues that mainstream economic research and policy advice rely heavily on production function models that use constant price sectoral GDP data as a proxy for sectoral output, despite this data not conceptually measuring physical output but rather factor incomes (wages and profits). This mismatch leads to significant risks of confirmation bias, as empirical analyses supporting industrialisation are based on problematic data and untested assumptions. The article suggests that consumers of policy advice should critically assess the methods and data underlying research, recognizing the potential for entrenched beliefs to overshadow observed economic realities, and adopt a cautious "buyer beware" stance.