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

Research output: Chapter in Book/Published conference outputChapter (peer-reviewed)peer-review


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.
Original languageEnglish
Title of host publicationThe Political Economy of Emerging Markets and Alternative Development Paths
EditorsJudit Ricz, Tamás Gerocs
Place of PublicationCham
PublisherPalgrave Macmillan
Number of pages24
ISBN (Electronic)978-3-031-20702-0
ISBN (Print)978-3-031-20701-3
Publication statusPublished - 18 Feb 2023

Publication series

NameInternational Political Economy Series
PublisherPalgrave Macmilla
ISSN (Print)2662-2483
ISSN (Electronic)2662-2491

Bibliographical note

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


  • Middle Income Trap
  • Development
  • Institutions
  • South Korea
  • path-independence
  • Soviet block
  • democracy


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