Local Research for Better Lives

You are here

Lessons for ASEAN Countries Stuck in a “Middle-Income Trap” from Korea’s Economic Development & Institutions

Photo by Pexels.

Name of the Asset | Lessons for ASEAN Countries Stuck in a “Middle-Income Trap” from Korea’s Economic Development & Institutions
Type of Asset | Working Paper
Date | December 2011


Korea's rapid transition from low-income status to high-income status in a few short decades is an impressive achievement. Many former low-income countries (LICs) that have transitioned to middle-income countries (MICs) shared similar situations and development patterns with Korea. However, many of these countries have remained stuck in MIC status. This paper analyzes this phenomenon, known as the middle-income trap (MIT), with a particular focus on the select ASEAN countries of Indonesia, Thailand, Malaysia and the Philippines. The paper focuses on governance and institutional quality during each country's lower and upper-middle-income stages and examines significant differences among the countries.

The paper finds that good governance and institutions are essential for promoting executive markets and private sector development, leading to increased productivity, investments and industrialization. Furthermore, the paper observes that improvements in infrastructure, R&D, and education have been important drivers enabling Korea's escape from the MIT.

Authors | Daniel Kasenda
Country and/or Region | ASEAN Countries
Name of the Program | KOICA Development Research Award 2014-15, a research competition held on the theme of the 'Relevance of Korean Development Experience in Developing Countries
Funder(s) |  Korea International Cooperation Agency (KOICA)

Download the Full Study here

If you cite this resource, please notify communications@gdn.int with the subject line 'GDN citation'.