Leiden University Student Repository

Bernal Cereceda, Jaime (2020)

Facing The Middle-Income Trap: How Chile Overcame It?

Master thesis | International Relations (MA)

Scholars widely agree on what mostly drives fast economic growth from the low-income (LI) level to the middle-income (MI) one. However, when it comes to jumping from the MI level to the high-income (HI) one, things become far more complex, as severe growth slowdowns become more frequent. This phenomenon, namely: the ‘middle-income trap’ (MIT), refers to the inherent challenges MI countries face in order to reach the HI status. The MIT is present in many comparative studies and policy models as empirical evidence suggests there are shared difficulties present at this level of income, and although it is still an ambiguous and undefined concept, its potential usefulness to guide policy-making is unmistakable, since the idea of a trap can be understood as universally applicable for developing economies struggling to achieve sustainable growth. Three bodies of MIT literature and their respective prescribed set of policies are categorized and analyzed in this study to determine which one...Show moreScholars widely agree on what mostly drives fast economic growth from the low-income (LI) level to the middle-income (MI) one. However, when it comes to jumping from the MI level to the high-income (HI) one, things become far more complex, as severe growth slowdowns become more frequent. This phenomenon, namely: the ‘middle-income trap’ (MIT), refers to the inherent challenges MI countries face in order to reach the HI status. The MIT is present in many comparative studies and policy models as empirical evidence suggests there are shared difficulties present at this level of income, and although it is still an ambiguous and undefined concept, its potential usefulness to guide policy-making is unmistakable, since the idea of a trap can be understood as universally applicable for developing economies struggling to achieve sustainable growth. Three bodies of MIT literature and their respective prescribed set of policies are categorized and analyzed in this study to determine which one can best attributed to the unique and successful case of Chile.Show less

Chile

comparative advantage

export composition

economic growth

growth slowdowns

Chilean economy

institutions and education

export diversification

MIT

middle income trap

Author

Bernal Cereceda, Jaime

Faculty

Faculty of Humanities

Specialisation

Global Political Economy

Supervisors

Silva, Patricio

ECTS Credits

15

Language

en