The Social Cost of Non-Middle-Class Nations on Economies

Ahmed Tahiri Jouti

Chapter 6 in Building Middle Class Nations, 2026, pp 157-186 from Springer

Abstract: Abstract Chapter 6 explores how the underperformance of social public policies directly impacts a country’s economic competitiveness, particularly by increasing the cost of doing business and reducing productivity. While economic, political, and social indicators are commonly used to assess a country’s business environment, hidden costs arising from inadequate education, healthcare, housing, and transportation systems place financial burdens on individuals and businesses. These costs lower employee well-being, fuel talent drain, and erode the country’s competitive advantage over time. The chapter warns that such inefficiencies create a vicious cycle: citizens and businesses lose trust in government performance, leading to tax avoidance and further weakening public policy effectiveness. Moreover, the financial burden of social gaps is unequally distributed, exacerbating inequality and undermining the emergence of a cohesive middle-class nation.

Keywords: Social cost; Inflation; Disparities; Social gaps (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-02134-2_6

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DOI: 10.1007/978-3-032-02134-2_6

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