Economists have reached a consensus on the existence of a middle income trap but have yet to theorize the politics of the trap. Key characteristics central to the problems of middle income countries (especially larger countries of Southeast Asia and Latin America) include low human capital, low investment in innovation, high inequality, and high informality. Solutions to these problems require substantial institutional capacity, but at just the time when political demands for, and ability to supply, these institutions are weak. Politics in particular are stalled by fractured social groups (especially business and labor) and states with little fiscal and bureaucratic capacity, conditions that resulted in large measure from previous trajectories of growth.

Ben Ross Schneider is Ford International Professor of Political Science at MIT and director of the MIT-Brazil program.

Francisco Panizza is head of the LSE IDEAS Latin American International Affairs Programme and reader in the department of government, LSE.

For further information about this event, please visit LSE IDEAS.

LSE IDEAS (@LSEIDEAS) is a foreign policy think-tank within LSE's Institute for Global Affairs.

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