No Access

Middle-Income Traps: A Conceptual and Empirical Survey

Fernando Gabriel Im

World Bank, 1818 H Street, NW, Washington, DC 20433, USA

Search for more papers by this author

and

David Rosenblatt

World Bank, 1818 H Street, NW, Washington, DC 20433, USA

Search for more papers by this author

https://doi.org/10.1142/S1793993315500131Cited by:24 (Source: Crossref)

Abstract

The term "middle-income trap" has entered common parlance in the development policy community, despite the lack of a precise definition. This paper discusses in more detail the definitional issues associated with the term. It also provides evidence on whether the growth performance of middle-income countries (MICs) has been different from other income categories, including historical transition phases in the inter-country distribution of income. A transition matrix analysis and an exploration of cross-country growth patterns provide little support for the existence of a middle-income trap.

Keywords:

JEL: D30, E00, F02, F60, N10, O11, O40

References

P.-R. Agénor and J. Aizenman, Journal of Development Economics 91(1), 1 (2010). Crossref, Google Scholar
Agénor, P-R and O Canuto (2012). Middle-income growth traps. (Working Paper No. 6210). Retrieved from the World Bank Website: http://documents.worldbank.org/ . Google Scholar
Aiyar, S, R Duval, D Puy, Y Wu and L Zhang (2013). Growth slowdowns and the middle-income trap. Working Paper No. WP/13/71. Retrieved from the International Monetary Fund Website: https://www.imf.org/external/ . Google Scholar
F. Antman and D. McKenzie, Journal of Development Studies 43(6), 1057 (2007). Crossref, Google Scholar
A. Antoci, M. Galeotti and P. Russu, Journal of Economic Theory 146(2), 569 (2011). Crossref, Google Scholar
C. Azariadis and A. Drazen, Quarterly Journal of Economics 105(2), 501 (1990). Crossref, Google Scholar
C. Azariadis and J. Stachurski, Handbook of Economic Growth 1A, eds. P. Aghion and S. N. Durlauf (North-Holland, Amsterdam, 2005) pp. 295–384. Google Scholar
A. Banerjee and E. Duflo, Handbook of Economic Growth 1A, eds. P. Aghion and S. N. Durlauf (North-Holland, Amsterdam, 2005) pp. 473–552. Crossref, Google Scholar
F. Bourguignon and C. Morrisson, American Economic Review 92(4), 727 (2002). Crossref, Google Scholar
F. Cai, China & World Economy 20(1), 49 (2012). Crossref, Google Scholar
Calderón, C and L Servén (2004). The effects of infrastructure development on growth and income distribution. Working Paper No. 3400. Retrieved from the World Bank Website: http://documents.worldbank.org/ . Google Scholar
G. Calvo, Journal of Applied Economics 1(1), 35 (1998). Crossref, Google Scholar
G. Calvo and C. Reinhart, Quarterly Journal of Economics 117(2), 379 (2002). Crossref, Google Scholar
C. M. Capraet al., The Economic Journal 119(539), 977 (2009). Crossref, Google Scholar
Chen, S and M Ravallion (2012). More relatively-poor people in a less absolutely-poor world. Working Paper No. 6114. Retrieved from the World Bank Website: http://documents.worldbank.org/ . Google Scholar
Commission on Growth and Development (2008). The Growth Report: Strategies for Sustained Growth and Inclusive Development. Washington, DC: World Bank . Google Scholar
D. Dollar and A. Kraay, Journal of Monetary Economics 50(1), 133 (2003). Crossref, Google Scholar
Eichengreen, B, D Park and K Shin (2011). When fast growing economies slow down: International evidence and implications for China. Working Paper No. 16919. Retrieved from the National Bureau of Economic Research Website: http://www.nber.org/papers/w16919 . Google Scholar
Felipe, J, A Abdon and U Kumar (2012). Tracking the middle-income trap: What is it, who is in it, and why? Working Paper No. 715. Retrieved from the Levy Economics Institute of Bard College Website: http://www.levyinstitute.org/publications/tracking-the-middle-income-trap . Google Scholar
Flaaen, A, E Ghani and S Mishra (2013). How to avoid middle income traps? Evidence from Malaysia. Working Paper No. 6427. Retrieved from the World Bank Website: http://documents.worldbank.org/ . Google Scholar
I. Gill and H. Kharas , An East Asian Renaissance: Ideas for Economic Growth ( World Bank , Washington, DC , 2007 ) . Crossref, Google Scholar
M. Gradstein, International Economic Review 49(3), 1043 (2008). Crossref, Google Scholar
J. D. Hamilton , Time Series Analysis ( Princeton University Press , Princeton, NJ , 1994 ) . Crossref, Google Scholar
Hausmann, R, L Pritchett and D Rodrik (2004). Growth accelerations. Working Paper No. 10566. Retrieved from the National Bureau of Economic Research Website: http://www.nber.org/papers/w10566 . Google Scholar
Jankowska, A, A Nagengast and JR Perea (2012). The product space and the middle-income trap: Comparing Asian and Latin American experiences. Working Paper No. 311. Retrieved from the OECD Website: http://www.oecd-ilibrary.org/ . Google Scholar
C. I. Jones and P. M. Romer, American Economic Journal: Macroeconomics 2(1), 224 (2010). Crossref, Google Scholar
Kanapathy, V, H Herizal, P Phongpaichit and P Benyaapikul (2014), Middle-income trap: Economic myth, political reality — Case studies from Mlaysia and Thailand. The Asia Foundation, http://asiafoundation.org/publications/pdf/1277 . Google Scholar
H. Kharas and H. Kohli, Global Journal of Emerging Market Economies 3(3), 281 (2011). Crossref, Google Scholar
A. Kraay and C. Raddatz, Journal of Development Economics 82(2), 315 (2007). Crossref, Google Scholar
M. Kremer, A. Onatski and J. Stock, Carnegie-Rochester Conference Series on Public Policy 55(1), 275 (2001). Crossref, Google Scholar
J. Y. Lin and D. Rosenblatt, Journal of Economic Policy Reform 15(3), 171 (2012). Crossref, Google Scholar
Lin, JY and V Treichel (2012). Learning from China's Rise to escape the middle-income trap: A new structural economics approach to Latin America. Working Paper No. 6165. Retrieved from the World Bank Website: http://documents.worldbank.org/ . Google Scholar
S. Liuet al., China Economist 7(1), 4 (2012). Google Scholar
N. V. Loayza and L. Servén , Business Regulation and Economic Performance ( World Bank , Washington, DC , 2010 ) . Crossref, Google Scholar
X. Ma, China Economist 7(1), 98 (2012). Google Scholar
Maddison, A (2010). Historical Statistics for the World Economy: 1–2009 AD [Data file]. Updated databases that originally were published in A. Maddison (2003), The World Economy: Historical Statistics, Paris: OECD Development Centre. Retrieved from Groningen Growth and Development Centre Website: http://www.ggdc.net/ . Google Scholar
N. G. Mankiw, D. Romer and D. N. Weil, Quarterly Journal of Economics 107(2), 407 (1992). Crossref, Google Scholar
B. Milanovic , Worlds Apart: Measuring International and Global Inequality ( Princeton University Press , Princeton, NJ , 2005 ) . Google Scholar
Nielsen, L (2011). Classification of countries based on their level of development: How it is done and how it could be done. Working Paper No. WP/11/31. Retrieved from the International Monetary Fund Website: https://www.imf.org/external/ . Google Scholar
S. L. Parente and E. C. Prescott, Handbook of Economic Growth 1A, eds. P. Aghion and S. N. Durlauf (North-Holland, Amsterdam, 2005) pp. 1371–1416. Google Scholar
L. Pritchett, Journal of Economic Perspectives 11(3), 3 (1997). Crossref, Google Scholar
L. Pritchett, World Bank Economic Review 14(2), 221 (2000). Crossref, Google Scholar
D. Quah, European Economic Review 37(3), 426 (1993). Crossref, Google Scholar
Quah, D (1996). Convergence as distribution dynamics (with or without growth). Discussion Paper No. 317. Retrieved from the Centre for Economic Performance Website: http://cep.lse.ac.uk/ . Google Scholar
D. Quah, Journal of Economic Growth 2(1), 27 (1997). Crossref, Google Scholar
M. Ravallion and S. Chen, Review of Economics and Statistics 93(4), 1251 (2011). Crossref, Google Scholar
Reinhart, C, KS Rogoff and MA Savastano (2003). Debt intolerance. Working Paper No. 9908. Retrieved from the National Bureau of Economic Research Website: http://www.nber.org/papers/w9908 . Google Scholar
J. Somchai, TDRI Quarterly Review 27(2), 13 (2012). Google Scholar
Woo, WT (2009). Getting Malaysia out of the middle-income trap. Working Paper. Retrieved from the University of California Davis Website: http://www.econ.ucdavis.edu/faculty/woo/woo.html, August 13, 2009 . Google Scholar
World Bank , World Development Indicators ( World Bank , Washington, DC , 2012 ) . Google Scholar
World Bank and Development Research Center of the State Council , China 2030: Building a Modern, Harmonious and Creative High-Income Society ( World Bank , Washington, DC , 2012 ) . Google Scholar
Yusuf, S and K Nabeshima (2009). Can Malaysia escape the middle-income trap? A strategy for Penang. Working Paper No. 4971. Retrieved from the World Bank website: http://documents.worldbank.org/ . Google Scholar