Rethinking Growth Slowdowns
What the World Development Report 2024 gets wrong - and why ideology matters
Is the “middle-income trap” real - or just a convenient narrative? The World Bank’s flagship report frames it as a structural inevitability - but critics argue the story is more about ideology than economics.
For two decades, policymakers have worried about countries stalling at middle-income levels. The World Development Report 2024 doubles down on this idea - suggesting industrial policy as the cure. But does the evidence support the trap - or is neoliberal thinking shaping the diagnosis?
Pritish Behuria and Andy Sumner critically review the WDR 2024 - questioning whether the middle-income trap exists at all. They argue that growth slowdowns are not universal patterns but context-specific - and that the report’s framing reflects ideological leanings toward market solutions.
Key insights:
The trap debate: Evidence for a universal middle-income trap is weak - many slowdowns occurred earlier than claimed.
Ideology at play: The WDR’s prescriptions lean heavily on neoliberal assumptions - sidelining alternative development models.
Alternative frameworks: Growth challenges may be better explained by structural transformation, global value chains, and political economy factors - not a mythical trap.
The middle-income trap may be less an economic law and more a policy narrative. Understanding its ideological roots is crucial for designing strategies that actually work.
Behuria, P. and Sumner, A. (2025), Middle-income Trap or Neoliberal Trap? Industrial Policy and Ideology in the World Development Report 2024. Dev Change. https://doi.org/10.1111/dech.70013