Has Escaping the Middle-Income Trap Become Easier?
The World Bank recently announced that 34 economies have achieved high-income status in recent decades, suggesting that the middle-income trap may not be as formidable as many believed. But this finding has less to do with genuine progress and more to do with the Bank’s practice of lowering the high-income threshold.
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SEOUL – The term “middle-income trap” refers to the tendency of fast-growing developing economies to lose momentum well before they achieve high-income status. First introduced by World Bank economist Indermit Gill and the Brookings Institution’s Homi Kharas in 2007, the concept has since become the subject of intense debate among economists.