THE INSTITUTIONAL MIDDLE-INCOME TRAP

Abstract

Most students of international development are familiar with the term “middleincome trap,” which refers to the penchant for countries to reach middle-income status and then stagnate1. In this short note I am proposing a similar and related phenomenon: the “institutional middle-income trap” or “institutional reform trap” whereby institutional development in middle-income developing countries starts out well but then stagnates, or does not reach its goal – which is usually to develop a world class institution. Universities are a particular example of this phenomenon. These observations are based on extensive institution building experience in 10 developing countries, more than half of which are classified as middle-income. They are also initial thoughts on which I plan to build in the future