FLBR - Brazil South Korea: Two Tales Of Climbing An Income Ladder

First appeared as Policy Brief PB-20/70, Policy Center for the New South

The “middle-income trap” has captured many developing countries: they succeeded in evolving from low per capita income levels, but then appeared to stall, losing momentum along the route toward the higher income levels of advanced economies (Gill & Kharas, 2007, 2015) (Canuto, 2019). Such a trap may well characterize the experience of Brazil and most of Latin America since the 1980s. Conversely, South Korea maintained its pace of evolution, reaching a high-income status (Figure 1).

Such divergence of economic growth can