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Global and domestic inequalities and the political economy of the midde-income trap

Svenja Flechtner and Stephan Panther

No Ök-29, Working Paper Series from Cusanus Hochschule, Institut für Ökonomie

Abstract: Some middle-income economies, many of which Latin American, have not achieved to make the transition into high-income status for long years and are allegedly trapped in middle-income status. While there is considerable consensus on the proximate causes of this phenomenon, we present a global political economy perspective to the discussion, arguing that global and domestic inequalities, both political and economic, are key to understand the issue. We subject our argument to empirical scrutiny, using fuzzy-set qualitative comparative analysis (fsQCA) on data spanning the years 1976-2009. Both domestic economic equality and political independence from the influence of an external power turn out to be robust characteristics supporting growth convergence of middle-income countries.

Keywords: inequality; independence; income distribution; distribution of wealth; dependence; Latin America (search for similar items in EconPapers)
JEL-codes: B52 D31 D63 F15 N36 O15 O29 O54 (search for similar items in EconPapers)
Date: 2017
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