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Structural transformation is among the core questions in development economics, but in recent decades, the discipline has shifted its focus away from production and transformation in favour of analyses on exchange, growth and productivity. Yet, the structural transformation question remains central, and needs to be confronted with the main changes in the global economic and political landscape, such as the emergence of the Belt and Road Initiative (BRI). With its emphasis on an infrastructure-based connectivity agenda, the BRI opens the space for a paradigm shift in development, and for a renewed emphasis on structural transformation. This article introduces a special issue that explores the role of the BRI in promoting structural transformation in low- and middle-income countries, to understand if and under which conditions the BRI creates pathways that can change the structure of the economies. Through an explicit focus on the role of BRI on transformation in low- and middle-income countries, this special issue examines how domestic institutions regulate and coordinate production diversification, national and international sectoral specificities, and drivers and barriers to technological innovation and trade. In this sense, the special issue sheds light on new conceptualisations and empirical examples of industrial policies. [ABSTRACT FROM AUTHOR]

With its infrastructural offer and emphasis on connectivity, China’s Belt and Road Initiative (BRI) promises to support developing countries aiming to industrialise. The literature on industrialisation has identified a key role for infrastructure, markets and the state. This article looks at the case of Kyrgyzstan, one of the early members of the initiative, to understand the circumstances under which the BRI can facilitate manufacturing growth. Notwithstanding the presence of accessible markets and financial support for infrastructure, Kyrgyzstan has made limited headway in its industrialisation agenda. This can be attributed to the particular political economy of Kyrgyzstan, which predominantly relies on extracting rent from the mining and other sectors and consequently fails to allocate resources towards industrialisation. Though purportedly interested in revitalising the industrial sector, Kyrgyz politicians have primarily focused on extractive industries, hence impeding diversification and industrialisation efforts. [ABSTRACT FROM AUTHOR]

• Combining varieties of capital and bureaucratic autonomy, we explain the link between Chinese capital and development. • The combination of a strong line ministry and Chinese state capital support the development of the Cambodian road network. • In the Sihanoukville gambling industry, a weak local government and profit-driven short-term capital create a 'Chinese silo'. • We define this variation in development achievements as 'fractured development'. The scholarly debate on how developing countries can effectively manage Chinese-sponsored infrastructure and investment (particularly since the launch of the Belt and Road Initiative,BRI) has largely focused on cross-country variations. Less attention has been devoted to within-country variations: why can certain sectors within a country better align Chinese corporate activities with their domestic development objectives than others? This study examines within-country variations by comparing Sino-Cambodian infrastructure cooperation at the national level and Chinese investment in the gambling industry in Sihanoukville. It argues that the host country's regulatory strength in combination with different varieties of capital determines the effectiveness of the government's attempts at achieving their development objectives. Using a case study approach based on primary interviews conducted in Phnom Penh and Sihanoukville, this article finds dramatically different outcomes in the two sectors under analysis. In the infrastructure sector, we find that the high regulatory strength deployed by the line ministry in conjunction with Chinese state capital achieves the government's infrastructure development goals. On the contrary, in the gambling industry in Sihanoukville, limited regulatory strength of the local government coupled with profit-driven short-term capital create a 'Chinese silo' that yields limited (or even negative) developmental outcomes. Our analysis shows that regulatory strength can shape and affect the outcomes of foreign capital. These results are supported by the analysis of two shadow cases in manufacturing and real estate. We define this state of affairs as 'fractured development'. [ABSTRACT FROM AUTHOR]

• Developing countries' governments exercise agency to shape the outcomes of the BRI. • The strategies deployed to exert agency depend on the countries' political context. • Cambodia allocates infrastructure work to different partners and employs careful debt management. • Myanmar closely scrutinises and renegotiates infrastructure projects. Discussions on Chinese-financed and Chinese-built infrastructure projects, and more recently about the Belt and Road Initiative (BRI), are often focused on China and fail to consider the role of the countries hosting these projects. Yet, host countries' dynamics are crucial to shaping the outcomes of BRI projects. This study investigates how the governments of developing countries in Southeast Asia leverage the BRI to achieve their own objectives. Through episode analysis based on literature and interviews conducted in Cambodia and Myanmar, we study the strategies deployed by these governments to influence the development of the BRI. We show that Cambodia uses strategies based on the principle of diversification , spreading infrastructure financing and implementation among a growing number of partners. We then show that the Myanmar government relies on impartiality to implement the proposed infrastructure projects and mitigate their risks. We link these strategies to the domestic contexts of Cambodia and Myanmar, discussing how these respond to the political setup of each country. This has important implications in terms of the narrative on the BRI, as it highlights the role of host country governments and of the domestic context in shaping outcomes. Our study fills a gap in the literature by providing a cross-country framework to understand how agency is deployed to achieve the desired outcomes in the context of the BRI, and more in general of infrastructure planning and implementation. [ABSTRACT FROM AUTHOR]