Tigers Trapped: Tracing the Middle-income Trap through the East and Southeast Asian Experience

Veerayooth Kanchoochat and Patarapong Intarakumnerd

No 1404, Competence Centre on Money, Trade, Finance and Development from Hochschule fuer Technik und Wirtschaft, Berlin

Abstract: The “middle-income trap†has recently become a powerful buzzword in the international development community. Despite using the same phrase, the existing literature varies considerably. The objective of this paper is twofold. First, it represents one of the earliest attempts at reviewing this burgeoning area of research. Based on differences in theoretical underpinnings and policy implications, the literature is classified into three groups: (1) getting education and institutions right; (2) changing export compositions by following comparative advantage; and (3) industrial upgrading by the proactive state. Second, it examines the validity of these three bodies of literature through catching-up experiences of selected newly industrializing economies in East and Southeast Asia. It argues that each strand falls into a different trap: the causal, the historical, and the practical. In discussing these three traps, this paper provides six propositions based theoretically on old-school development economics and innovation literature.

Keywords: middle-income trap; Asian Newly Industrializing Economies (NIEs); state intervention; industrial policy; structural transformation (search for similar items in EconPapers)
JEL-codes: O14 O25 O53 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2014-02
New Economics Papers: this item is included in nep-ino and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Berlin Working Papers on Money, Finance, Trade and Development, February 2014

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Persistent link: https://EconPapers.repec.org/RePEc:mtf:wpaper:1404

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