From Developing to Developed Nations

The theory of economic development deals with long-run determinants of economic growth that determine the sustained pathways to economic prosperity and well-being of the people. However, this science of understanding the process of economic deve­lopment is yet to solve the hurdles of the transition process from developing to advanced nations. The evidence of limited spread of economic prosperity after the industrial revolution was confined to Europe and North America and in recent years to some South East Asian countries. A major set of countries are struggling to pass the low- or middle-income trap (MIT) to achieve economic development on par with the advanced countries popularly called catch-up or convergence. Those nations trapped in the low- or middle-income countries’ category are in search of policy alter­natives that can allow them to break the trap to become full-fledged developed nations. The book written by Keun Lee is an attempt to provide a recipe to overcome the MIT for the deve­loping economies. This book is unique in many respects and is a seminal contribution to the economic development literature for unravelling the process of economic development and public policy that can be used by the MIT group of nations to pass through the narrow tunnel to grow as developed nations.

The book is organised into seven chapters. Chapter 1 provides a fresh perspective to explore the question as to why countries had fallen into the MIT and how the existing knowledge about it is inadequate. The author has explored the development pathways chosen by the East Asian Countries, such as South Korea, Taiwan and more recently China which has rationalised how this pathway can be generalised and used as an alternative strategy to cross over the MIT. This chapter follows the theoretical framework developed recently by Lundvall and Nelson on the lines of Schumpeterian tradition which is called as national innovation system. The author has extended this tradition while identifying the weaknesses of the innovation system of MIT economies and suggested how it can be made suitable to overcome the so-called MIT.