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

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  • Flechtner, Svenja
  • Panther, Stephan

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.

Suggested Citation

  • Flechtner, Svenja & Panther, Stephan, 2017. "Global and domestic inequalities and the political economy of the midde-income trap," Working Paper Serie des Instituts für Ökonomie Ök-29, Hochschule für Gesellschaftsgestaltung (HfGG), Institut für Ökonomie.
  • Handle: RePEc:zbw:cuswps:oek29
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    More about this item

    Keywords

    inequality; independence; income distribution; distribution of wealth; dependence; Latin America;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • F15 - International Economics - - Trade - - - Economic Integration
    • N36 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Latin America; Caribbean
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O29 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Other
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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