It’s Democracy, Stupid: Reappraising the Middle-Income Trap
Claudia Rives Casanova
The causes and reasons for countries’ economic growth and development have long been a challenging subject for research and debate. It is observed that while many countries experience high growth when they are low-income countries, once they become middle-income countries rapid growth is often followed by economic stagnation, with the potential for increasing social unrest as a result. A key puzzle is therefore why many middle-income countries fail to sustain suf-ficient economic growth to become high-income countries. A relatively recent concept in this debate is that of the Middle Income Trap (MIT), which argues that countries encounter a series of obstacles when trying to adapt their econo-mies and comparative advantages to become more specialized market econo-mies. In other words, the very same factors that fueled growth in the early stag-es act as a hindrance at the middle-income level, slowing down and eventually causing a stagnation of the growth process, if the correct policies are not im-plemented. This study seeks to reappraise the MIT concept by going beyond a mainstream analysis, which focuses mainly on economic aspects of growth/stagnation. Accordingly, while prudent economic management and pol-icies are vital to avoid the MIT, factors relating to governance, institutions, in-clusive growth, and education, among others, can underlie and play a determin-ing role in explaining failure or success in sustaining economic growth. There-fore, non-economic dimensions are fundamental for any reform or structural change, and, as is argued in this paper, democratic governance can serve as a useful proxy for many of these factors.
Related Publications
-
Awaiting a Pivotal Partnership? The Case of India and South Korea
The shift toward showcasing South Korea as a proactive stakeholder in the global arena—beyond its foreign policy limitations that have thus far centered on Northeast Asian security—has unlocked the potential […]
-
Towards a Sustainable Arctic: International Security, Climate Change and Green Shipping
The Arctic’s environment, economics, and politics are changing rapidly, and the conflicting interests among stakeholders mean that it lacks sustainable political and military cooperation. States bordering the Arctic — Russia, […]
-
An Interview with MARGARETA WAHLSTRÖM: Gender Equality on the Korean Peninsula
In commemoration of International Women’s Day on March 8, gender and development expert Elin Eriksson from ISDP’s Korea Team sat down with humanitarian aid professional Margareta Wahlström to address some […]
-
Kishida in Cambodia: Seeking Regional Consensus Amid the China Threat?
Last of a two part series on Prime Minister Fumio Kishida’s travel to India and Cambodia in March 2022. This article is part of the [Asia’s Next Page] series on JAPAN […]
-
North Korean Women as New Economic Agents: Drivers and Consequences
Abstract This Issue Brief explores the changing social and economic role of women in North Korea since the so-called Arduous March of the 1990s. With the breakdown of the public […]
-
Taking Stock of China’s Anti-Discrimination Legislation
Summary China’s transition to a socialist market economy in 1978 – resulting in increased competition, especially in the labor market – introduced greater opportunities for discrimination. Since the 1990’s, China […]