Middle-Income Trap and the Evolving Role of Institutions along the Development Path

Abstract

Since the mid-twentieth century, we observe large differences in the development paths of countries, even when characterised by similar starting positions. Taiwan and South Korea hold world records in the speed of development, some of Latin America score in the middle, and few African countries are poorer per capita than they were seventy years ago. The main puzzle relates to countries stuck in the middle range of development. At this stage, innovativeness, openness, and adaptability are characteristics that become critical for further development. Yet, these successful development strategies may not be followed, when middle-income traps arise in a form of lock-ins of oligarchic political and economic power structures. This implies that political institutions matter early on, and small institutional differences may be amplified over time due to path dependence. Supporting empirical tests based on PENN World Table data are offered.

Publication DOI: https://doi.org/10.1007/978-3-031-20702-0_3
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Centre for Personal Financial Wellbeing
College of Business and Social Sciences > Aston Business School
Additional Information: Copyright © 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG. This version has been accepted for publication, after peer review and is subject to Springer Nature’s AM terms of use [https://www.springernature.com/gp/open-research/policies/accepted-manuscript-terms], but is not the Version of Record and does not reflect post-acceptance improvements, or any corrections. The Version of Record is available online at: https://doi.org/10.1007/978-3-031-20702-0_3
Uncontrolled Keywords: Middle Income Trap,Development,Institutions,South Korea,path-independence,Soviet block,democracy,Economics, Econometrics and Finance(all)
ISBN: 978-3-031-20701-3, 978-3-031-20702-0
Last Modified: 23 May 2024 07:32
Date Deposited: 03 Mar 2023 16:32
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Related URLs: https://link.sp ... 3-031-20702-0_3 (Publisher URL)
http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Chapter (peer-reviewed)
Published Date: 2023-02-18
Authors: Mickiewicz, Tomasz (ORCID Profile 0000-0001-5261-5662)

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