Rural Transformation in a Pastoral Economy Under Mining-Led Growth: Evidence from Mongolia

Rural transformation (RT) theory is crucial for economic development, but transformations in pasture-based systems remain underexplored relative to agrarian ones. This paper applies a canonical RT framework to the aimag-level Mongolian data, integrating inclusivity and ecological sustainability to analyze structural change in pastoral economies amid livestock production and mining expansion. Key findings reveal: (1) structural transformation (ST) advances mainly on the output side, with agriculture contributing 10–13% of value added yet employing 27% of workers, entrenching an output–employment wedge; (2) non-farm employment spreads widely across aimags, but agricultural productivity gains are spatially concentrated and episodic, desynchronizing agricultural development (AD) and ST–RT’s core pillars; and (3) mining-intensive aimags exhibit greater employment diversification but no systematic agricultural productivity premium, indicating that resource-led structural change does not automatically translate into productivity upgrading in pastoral agriculture. Mongolia’s progress is tangible but uneven. The findings point to the importance of strengthening productive linkages, local processing, infrastructure, technological upgrading, and ecological management so that resource-led structural change can support broader and more inclusive productivity growth.