Chapter 7 Patterns of structural change This chapter presents a discussion on the patterns of structural transformation during the transition from a low income agrarian rural economy to an industrial urban economy with substantially higher per capita income. The chapter presents a review on the basic concepts of the empirical research program into the economic structure of developing countries during the transition process which originated with the monumental work of Simon Kuznets. The chapter discusses methodological issues of empirical research on structural transformation. A summary of the main stylized facts of development with emphasis on growth accumulation and sector proportions is presented. Attempts to model and explain the transformation are also presented. The chapter also discusses relative prices and the role of the state in facilitating fostering or at times hampering an efficient transformation. Development economics can be characterized as dealing with issues of structure and growth in less developed countries. Analysis of structure appears in two variants. The first and more recent is concerned with the functioning of economies their markets institutions mechanisms for allocating resources income generation and its distribution and so on. In the second variant economic development is seen as an interrelated set of long run processes of structural transformation that accompany growth. The central features of this approach are economy wide phenomena such as industrialization urbanization and agricultural transformation regarded as elements of what Kuznets identified as modern economic growth.