Transitioning from Low-Income Growth to High-Income Growth: Is There a Middle Income Trap?

38 Pages Posted: 20 Apr 2016

See all articles by David Bulman

David Bulman

World Bank

Maya Eden

World Bank - Development Research Group (DECRG)

Ha Nguyen

World Bank

Multiple version iconThere are 2 versions of this paper

Date Written: November 1, 2014

Abstract

Is there a "middle income trap" ? Theory suggests that the determinants of growth at low and high income levels may be different. If countries struggle to transition from growth strategies that are effective at low income levels to growth strategies that are effective at high income levels, they may stagnate at some middle income level; this phenomenon can be thought of as a "middle income trap." This paper does not find evidence for (unusual) stagnation at any particular middle income level. However, it does find evidence that the determinants of growth at low and high income levels differ. These findings suggest a mixed conclusion: middle-income countries may need to change growth strategies to transition smoothly to high-income growth strategies, but this can be done smoothly and does not imply the existence of a middle income trap.

Keywords: Macroeconomic Management, Economic Forecasting, Governance Diagnostic Capacity Building, Technology Industry, Economic Policy, Institutions and Governance, Technology Innovation

Suggested Citation

Bulman, David and Eden, Maya and Nguyen, Ha, Transitioning from Low-Income Growth to High-Income Growth: Is There a Middle Income Trap? (November 1, 2014). World Bank Policy Research Working Paper No. 7104. Available at SSRN: https://ssrn.com/abstract=2523712

David Bulman

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Maya Eden (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Ha Nguyen

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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