This research paper attempts to contribute to the literature by filling the knowledge gap of sociopolitical explanations in the Middle-Income Trap debate. The objective of this paper is to...Show moreThis research paper attempts to contribute to the literature by filling the knowledge gap of sociopolitical explanations in the Middle-Income Trap debate. The objective of this paper is to highlight how and why economic and political elites in Mexico influence the implementation of policies to escape the Middle-Income Trap. The research question attempted to answer is: How and why do social cleavages influence the Middle-Income Trap in Mexico? The argument is two-fold. The one side is that economic elites, meaning domestic and foreign firms, have different interests from each other that prevent the formation of coalitions from cooperating and upgrading the necessary implementation. The outcome of this incoordination is demonstrated through data on engineer graduates, high-tech exports and research and development. Both domestic and foreign businesses do not have the incentive to initiate policies that would boost the economy to innovate. The second part of the argument is that political elites and the domination of the political field by domestic companies divert resources away from the implementation of upgrading coalitions through clientelistic politics and corruption. This paper has utilised both previously gathered quantitative and qualitative data to highlight how and why political and economic elites do not implement the necessary policies. The article establishes a partial link between economic and political elites and the middle-income trap. However, the findings cannot be conclusive as more extensive research needs to be done to account for the limitations. Further research is required to both establish a precise link between elites and the MIT but also to propose suitable coalitions for Mexico.Show less
