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The Middle-Income Trap and Competition Policy: An Institutional Analysis

  • Huike Song

    Huike Song is a joint PhD candidate at the University of International Business and Economics in Beijing and at the Department of Applied Economics of the Vrije Universiteit Brussel. Caroline Buts and Marc Jegers are both professor at the Department of Applied Economics of the Vrije Universiteit Brussel.

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    , Caroline Buts und Marc Jegers
Veröffentlicht/Copyright: 20. Januar 2023
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Abstract

This article studies a potential link between the middle-income trap and competition policy. It analyzes how a country’s competition policy relates to the transition process from the middle-income stage to the high-income stage, and what features of competition policy are accompanying a countryʼs successful leap from the middle-income group of countries. We find that to avoid falling into the middle-income trap, a country should have an appropriate institutional environment, which includes rigorous adherence to the rule of law, high regulatory quality, and high government effectiveness. It seems necessary to introduce competition policy as early as possible for countries in the upper middle-income stage. The quality of competition law and the independence of the competition authority must be guaranteed.

JEL Classification: E61; O11; O57; P52

Corresponding author: Huike Song, University of International Business and Economics, Institute for International Economics, No.10 Huixin Dongjie, Chaoyang District, Beijing, 100029 Beijing, China, E-mail:

About the author

Huike Song

Huike Song is a joint PhD candidate at the University of International Business and Economics in Beijing and at the Department of Applied Economics of the Vrije Universiteit Brussel. Caroline Buts and Marc Jegers are both professor at the Department of Applied Economics of the Vrije Universiteit Brussel.

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Published Online: 2023-01-20

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