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The Product Space and the Middle-Income Trap: Comparing Asian and Latin American Experiences


  • Anna Jankowska


  • Arne Nagengast


  • José Ramón Perea



Rapid and sustained economic growth in the emerging world has brought new members, notably China, into the group of middle-income countries. Reaching this level of income, however, has historically presented countries with a new set of challenges to development, resulting in slowing growth and an entrapment in what is known as the middle-income trap. Limited income convergence in Latin America has at least partly been due to its reduced capacity to engage in a structural transformation conducive to higher productivity. In contrast, emerging Asia offers a few examples of these ‚virtuous. productive transformations. With these two references in mind, we build a comparative analysis based on the following points: First, we illustrate differences in the process of structural transformation, both with regard to sector productivity and employment absorption. Second, we adopt the Product Space methodology to compare the structural transformation that took place in both regions. Finally, we consider the role played by Productive Development Policies (PDP) in shaping the process of structural transformation, through a comparative review of these policies in Korea, Brazil and Mexico. In short, the analysis allows us to gauge the role that the economic specialisation of a country plays in facilitating transitions to more advanced stages of economic development. La croissance rapide et soutenue dans les économies émergentes a fait rentrer des nouveaux membres, dont la Chine, dans le groupe des pays à revenu intermédiaire. Cependant, atteindre ce niveau de revenu, a historiquement supposé pour ces pays de faire face à de nouveaux défis pour le développement, entraînant un ralentissement de la croissance et une situation de stagnation connue sous le nom de piège des revenus intermédiaires. La convergence toutefois limitée de l’Amérique latine est en partie expliquée par sa capacité réduite à s’engager dans des transformations structurelles vers une productivité plus élevée. En revanche, l’Asie émergente nous présente des exemples de ces vertueuses transformations productives. Tenant compte de ces deux différences, nous élaborons une analyse comparative basée sur les dimensions suivantes : D’abord, nous illustrons des différences dans le processus de transformation structurelle, à la fois par rapport à la productivité sectorielle et la relocalisation d’emplois. Par la suite, nous adoptons la méthodologie de Product Space pour comparer la transformation structurelle qui a eu lieu dans les deux régions. Finalement, nous considérons le rôle des politiques de développement productives (PDP) pour déterminer le processus de transformation structurel, à travers une révision comparative de ces politiques en Corée, au Brésil et au Mexique. En somme, l’analyse permet d’évaluer le rôle que la spécialisation économique d’un pays peut jouer pour faciliter la transition vers des phases de développement économique plus avancées.

Suggested Citation

  • Anna Jankowska & Arne Nagengast & José Ramón Perea, 2012. "The Product Space and the Middle-Income Trap: Comparing Asian and Latin American Experiences," OECD Development Centre Working Papers 311, OECD Publishing.
  • Handle: RePEc:oec:devaaa:311-en

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    References listed on IDEAS

    1. Pablo T. Spiller & Ernesto H. Stein & Mariano Tommasi & Carlos Scartascini & Lee J. Alston & Marcus André Melo & Bernardo Mueller & Carlos Pereira & Cristóbal Aninat & John Londregan & Patricio Navia , 2008. "Policymaking in Latin America: How Politics Shapes Policies," IDB Publications (Books), Inter-American Development Bank, number 40178 edited by Ernesto H. Stein & Mariano Tommasi & Pablo T. Spiller & Carlos Scartascini, February.
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    Cited by:

    1. Rui Faustino, 2016. "Portuguese National Accounts: a network approach," Working Papers Department of Economics 2016/18, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    2. Araújo, Tanya & Faustino, Rui, 2017. "The topology of inter-industry relations from the Portuguese national accounts," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 479(C), pages 236-248.
    3. Glawe, Linda & Wagner, Helmut, 2016. "China in the Middle-Income Trap?," MPRA Paper 73336, University Library of Munich, Germany.
    4. Helmut Wagner, 2015. "Structural Change and Mid-Income Trap – Under which conditions can China succeed in moving towards higher income status?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 12(2), pages 165-188, December.
    5. Marco Vivarelli, 2016. "The middle income trap: a way out based on technological and structural change," Economic Change and Restructuring, Springer, vol. 49(2), pages 159-193, August.
    6. Larrú, José María, 2013. "The developmental contribution of the Offset Agreements: the case of Colombia," MPRA Paper 51456, University Library of Munich, Germany.
    7. repec:wsi:jicepx:v:06:y:2015:i:03:n:s1793993315500179 is not listed on IDEAS
    8. Marco Vivarelli, 2015. "Structural Change and Innovation in Developing Economies: A Way Out of the Middle Income Trap ?," LEM Papers Series 2015/09, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    9. Shekhar Aiyar & Romain A Duval & Damien Puy & Yiqun Wu & Longmei Zhang, 2013. "Growth Slowdowns and the Middle-Income Trap," IMF Working Papers 13/71, International Monetary Fund.
    10. Andreas Reinstaller & Peter Reschenhofer, 2015. "Path dependence in national systems of production and "self discovery" of environmental technologies in the EU 28 countries," WWWforEurope Working Papers series 106, WWWforEurope.
    11. repec:jfr:ijfr11:v:8:y:2017:i:3:p:195-208 is not listed on IDEAS
    12. Tanya Ara'ujo & Rui Faustino, 2016. "The Topology of Inter-industry Relations from the Portuguese National Accounts," Papers 1612.06291,
    13. Vivarelli, Marco, 2014. "Structural Change and Innovation as Exit Strategies from the Middle Income Trap," IZA Discussion Papers 8148, Institute for the Study of Labor (IZA).
    14. Christian Daude & Arne Nagengast & Jose Ramon Perea, 2016. "Productive capabilities: An empirical analysis of their drivers," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(4), pages 504-535, June.
    15. Gill,Indermit S. & Kharas,Homi, 2015. "The middle-income trap turns ten," Policy Research Working Paper Series 7403, The World Bank.
    16. Semih Gökatalay, 2015. "Political Economy of Middle-Income Trap Concept," EY International Congress on Economics II (EYC2015), November 5-6, 2015, Ankara, Turkey 275, Ekonomik Yaklasim Association.
    17. Fernando Gabriel Im & David Rosenblatt, 2015. "Middle-Income Traps: A Conceptual and Empirical Survey," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 1-39.
    18. International Monetary Fund, 2015. "Republic of Estonia; Selected Issues," IMF Staff Country Reports 15/337, International Monetary Fund.
    19. Guzmán Ourens, 2012. "Can the Method of Re?ections help predict future growth?," Documentos de Trabajo (working papers) 1712, Department of Economics - dECON.
    20. Kumagai, Satoru, 2014. "The middle-income trap from the viewpoint of trade structures," IDE Discussion Papers 482, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    21. Paus, Eva, 2014. "Latin America and the middle-income trap," Financiamiento para el Desarrollo 250, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    22. Rigg, Jonathan & Promphaking, Buapun & Le Mare, Ann, 2014. "Personalizing the Middle-Income Trap: An Inter-Generational Migrant View from Rural Thailand," World Development, Elsevier, vol. 59(C), pages 184-198.

    More about this item


    espace produit; exportations; exports; middle-income trap; piège du revenu intermédiaire; product space;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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