The middle-income trap: Structural change difference between successful and failed countries


Tezin Türü: Yüksek Lisans

Tezin Yürütüldüğü Kurum: Marmara Üniversitesi, Sosyal Bilimler Enstitüsü, İktisat (İngilizce) Anabilim Dalı, Türkiye

Tezin Onay Tarihi: 2020

Tezin Dili: İngilizce

Öğrenci: MERVE KAYA

Danışman: Fatma Doğruel

Özet:

ABSTRACT

Structural change and technological catch-up are the key transformations

necessary for economic development. How different are structural change and

technological catch up processes of the countries that performed fast transitions to high

income category and of the countries undergoing slow transitions? The analysis is based

on the structural modernisation index developed by Lavopa & Szirmai (2018) as a

measure of a sector’s relative productivity weighted by its size in the economy. It

illustrates average achievement of a sector in the two dimensions of structural

transformation. Taking into account the middle income trap literature, the modified

structural modernisation index values are calculated for manufacturing and technology

intensive sectors which are important for development of middle income countries. The

successful countries (the countries that performed fast transitions) are diverged from the

failed countries (the countries undergoing slow transitions) in medium & medium-high

tech manufacturing index values. The failed countries could not sufficiently improve at

least one of the transformations. Therefore, the findings of this study supports the

literature emphasizing the importance of domestic innovation, moving up to value chain,

and fostering structural change towards sectors with advanced technological contents. It

also agrees with the idea that the countries must expand the share of high-tech sectors in

the economy and decrease technology gap simultaneously. Improving only one of them

is not sufficient to be successful in the way of becoming a high income country.

Furthermore, the findings signal an early deindustrialization in some of the failed

countries.