
TrapMiddleTheIncome TrapMiddleTheIncome ©2024International Bank for Reconstruction and Development / The World Bank1818H Street NW, Washington, DC20433Telephone:202-473-1000; Internet:www.worldbank.org Some rights reserved 1 2 3 4 27 26 25 24 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, andconclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of ExecutiveDirectors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work anddoes not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respectto the use of or failure to use the information, methods, processes, or conclusions set forth. The boundaries, colors,denominations, links/footnotes, and other information shown in this work do not imply any judgment on the part ofThe World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.The citation of works authored by others does not mean The World Bank endorses the views expressed by those authorsor the content of their works. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges andimmunities of The World Bank, all of which are specifically reserved. This work is available under the Creative Commons Attribution3.0IGO license (CC BY3.0IGO)http://creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy,distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: World Bank.2024.World Development Report2024: The Middle-IncomeTrap. Washington, DC: World Bank. doi:10.1596/978-1-4648-2078-6. License: Creative Commons Attribution CC BY3.0IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution:This translation was not created by The World Bank and should not be considered an official World Bank translation.The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution:This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the soleresponsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained withinthe work. The World Bank therefore does not warrant that the use of any third-party-owned individual componentor part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting fromsuch infringement rests solely with you. If you wish to reuse a component of the work, it is your responsibility todetermine whether permission is needed for that reuse and to obtain permission from the copyright owner. Examples ofcomponents can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank,1818H Street NW,Washington, DC20433, USA; e-mail:pubrights@worldbank.org. ISSN, ISBN, e-ISBN, and DOI: HardcoverISSN:0163-5085ISBN:978-1-4648-2097-7DOI:10.1596/978-1-4648-2097-7 Softcover ISSN:0163-5085ISBN:978-1-4648-2078-6e-ISBN:978-1-4648-2096-0DOI:10.1596/978-1-4648-2078-6 Cover and interior design:Creative Services, Global Corporate Solutions, World Bank.Library of Congress Control Number:2024941787 Contents xvForewordxviiAcknowledgmentsxxiSummaryxxvGlossaryxxixAbbreviations 1Overview: Making a Miracle 1In brief2‘To get rich is glorious’4One trap or two?5Investment, infusion, and innovation—additively and progressively10The economics of creative destruction17Striking the right balance26The road ahead28Notes28References 31Part 1:Middle-Income Transitions33Chapter 1:Slowing Growth 33Key messages33Introduction34Growth in middle-income countries37Measuring progress through the middle stages of development40Growth in middle-income countries is slower45Notes45References47Spotlight 53Chapter 2:Structural Stasis 53Key messages53Introduction55Economic development = structural change56Infuse first, then innovate67Notes67References 69Chapter 3:Shrinking Spaces Key messages 6969Introduction72Fragmenting international trade73Elevated debt75Climate action78Notes78References 81Part 2:Creative Destruction 85Key messages85Creation: The protagonist of economic growth, where incumbents createvalue alongside entrants88Creative destruction: Three decades of increasingly refined analysis91In middle-income countries, too few small entrants disrupt, and too fewlarge incumbents innovate or infuse global tech