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The Political Economy of the Middle Income Trap: The Challenges of Advancing Innovation Capabilities in Latin America, Asia and Beyond

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  • Nahee Kang
  • Eva Paus

Abstract

Building on the middle-income trap literature where contexts of time and location matter, the articles in this special section adopt a ‘political economy of development’ approach to the problem of the middle-income trap. The papers employ different analytical approaches and have different entry points into unpacking the complex economic, social, and technical processes that advance productive capabilities. But they share a common set of assumptions undergirding a political economy approach and come to a common understanding that advances the middle-income trap discussion: (1) the development of domestic productive capabilities is critical for upgrading and developing broad-based innovation that may translate into higher productivity growth; (2) the interaction of international with domestic factors changes over time and may exacerbate domestic innovation challenges; and (3) the nature of the inter-workings between the government and actors in the private sector is crucial for understanding the advancement of innovation capabilities or lack thereof. All the papers point to the importance of a systemic and long-term approach to building productive capabilities and the need for strong state action to advance these capabilities.

Suggested Citation

  • Nahee Kang & Eva Paus, 2020. "The Political Economy of the Middle Income Trap: The Challenges of Advancing Innovation Capabilities in Latin America, Asia and Beyond," Journal of Development Studies, Taylor & Francis Journals, vol. 56(4), pages 651-656, April.
  • Handle: RePEc:taf:jdevst:v:56:y:2020:i:4:p:651-656
    DOI: 10.1080/00220388.2019.1595601
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    Cited by:

    1. Carlos Bianchi & Fernando Isabella & Santiago Picasso, 2023. "Growth slowdowns at middle income levels: Identifying mechanisms of external constraints," Metroeconomica, Wiley Blackwell, vol. 74(2), pages 288-305, May.
    2. Fernanda Cimini & Jorge Britto & Leonardo Costa Ribeiro, 2020. "Complexity systems and middle-income trap: the long-term roots of Latin America underdevelopment [Sistemas complexos e armadilha da renda media: as raízes de longo prazo do subdesenvolvimento latino-a," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 30(spe), pages 1225-1256, December.
    3. Avlijas, Sonja & Gartzou-Katsouyanni, Kira, 2024. "Firm-centered approaches to overcoming semi-peripheral constraints," LSE Research Online Documents on Economics 123742, London School of Economics and Political Science, LSE Library.

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