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The Political Economy of Middle‐Income Traps: Is S outh A frica in a Long‐Run Growth Trap? The Path to “Bounded Populism”
Author(s) -
Luiz John M.
Publication year - 2016
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/saje.12117
Subject(s) - middle income trap , economics , modernization theory , trap (plumbing) , politics , populism , value (mathematics) , political economy , economic system , development economics , political science , economic growth , china , geography , machine learning , meteorology , law , computer science
Abstract The current literature on middle‐income traps has been dominated by economists who have relied on economic explanations mainly around stages of development and the structural transformation of economies. But there is an equally vigorous literature from political science which speaks to the political economy of transitions. We look at the dynamics of how economic modernisation triggers structural changes with winners and losers and how this is reflected in the polarisation of the political sphere amongst middle‐income countries. This paper asks the question of whether S outh A frica is an archetypical example of a country stuck in a trap and how this has affected the policy choices that it has made. S outh A frica needs to move up the value chain with a viable value proposition, and this requires a very different policy set and human capital plan.