Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 13 March 2019

Sustainable Development vs. Middle-Income Trap

Bozena Leven

The College of New Jersey, USA

Download Full-Text Pdf



The middle-income trap (MIT) describes a situation faced by countries at a relatively mature stage of development that often poses an obstacle to sustainable long-term growth. The MIT is characterized by declining factor productivity from the exhaustion of labor-intensive, import and Foreign Direct Investment (FDI) based strategies when middle-income status is achieved. In this paper we focus on the MIT and Poland. In the past two decades, Poland experienced steady growth based largely on imported technologies and low-cost labor. Recently that economic growth has slowed, prompting economists to ask whether Poland is experiencing an MIT. To answer this question, we analyze changes in investment in Poland – specifically its growth and composition – as well as savings, FDI, educational attainments of the labor force, development of new technologies and products, the role of imports, diversification of exports, and product complexity. We also examine the development of modern infrastructure, institutions (including legal environment) and demographic changes in Poland that support growth. Our findings indicate that certain factors consistent with the MIT are gaining importance in Poland and that those factors represent a challenge to Poland's future growth rate.


  1. “Age Dependency Ratio." (2016). IndexMundi - Country Facts retrieved from

  2. Ancyparowicz, G. (2009). "The Impact of Direct Foreign Investments on the Growth of the Polish Economy in the Post-Accession Period." Central Statistical Office of Poland: Information Portal. GŁÓWNY URZĄD STATYSTYCZNY, Department Statystyki Finansów retrieved from:

  3. Baumol, W. (1967). Macroeconomics of unbalanced growth: the anatomy of urban crisis. The American Economic Review 57(3), 415-426.

  4. Eichengreen, B. (2011). Escaping the Middle-Income Trap. Proceedings - Economic Policy Symposium - Jackson Hole,  409-19.  Federal Reserve Bank of Kansas City. Web

  5. Exports/Imports by Sections CN/SITC/CPA/BEC and Groups of Countries. (2017). Analyses and Decisions Support System (SWAiD). Central Statistical Office of Poland

  6. Felipe, J. (1999). Total Factor Productivity Growth in East Asia: A Critical Survey. Journal of Development Studies 35 (4), 1-41. Web

  7. Fixed Assets in the National Economy in 2013. (2014). Poland. Central Statistical Office.  Central Statistical Office & National Accounts Department, 29 December, Web.

  8. Gill, I. Homi K. (2007). An East Asian Renaissance: Ideas for Economic Growth. Washington, DC: World Bank.

  9. Griffith, B. (2011). Middle-income trap. Frontiers in Development Policy: A Primer on Emerging Issues. ed. Raj Nallari, Shahid Yusuf, Rwitwika Bhattacharya. World Bank, 39-43.

  10. Hayat A. (2014). FDI and Economic Growth: The role of Natural Resources. IES Working Paper 36/2014. IES FSV. Charles University.

  11. Jankowska, A. Nagengast, A.; Perea, J. (2012) . The Product Space and the Middle-Income Trap: Comparing Asian and Latin American Experiences,  OECD Development Centre Working Papers, No. 311, OECD Publishing, Paris.

  12. Jimenez, E. Nguyen, V. Patrinos, H. (2012). Stuck in the Middle? Human Capital Development and Economic Growth in Malaysia and Thailand. Policy Research Working Paper; no. WPS 6283. Washington, DC: World Bank.

  13. Kersan-Škabić, I. Tijanić L. (2017) Regional Absorption Capacity of EU Funds. Economic Research-Ekonomska Istraživanja 30(1) 1191-1208. Taylor & Francis Online. Web.

  14. Khan, M. Bergquist, K. Lamb, R. Le Feuvre, B. Raffo, J. Torres, G. and Hao Zhou. (2016). "World Intellectual Property Indicators 2016: Economics & Statistics Series." The Journal of World Intellectual Property 19.5-6 Web.

  15. Leibfritz W. Roeger W. (2008). The Effects of Aging on Labor Markets and Economic Growth. In: Hamm I., Seitz H., Werding M. (eds) Demographic Change in Germany. Springer, Berlin, Heidelberg.

  16. Martin, F. (2017). Why Does Economic Growth Keep Slowing Down?. On the Economy Blog. Federal Reserve Bank of St. Louis, 9 Feb. 2017. Web.

  17. Mishal, Z. Abulaila, Z. (2007). The Impact of Foreign Direct Investment and Imports on Economic Growth: The Case of Jordan. Journal of Economic and Administrative Sciences. 23. 1-31. 10.1108/10264116200700001.

  18. Nelson, Richard R (1956). “A Theory of the Low-Level Equilibrium Trap in Underdeveloped Economies.” The American Economic Review.46 (5), 894–908.

  19. North, D. Institutions and economic growth: An historical introduction. (1989). World Development, 17 (9), 1319-1332.

  20. OECD Economic Surveys: Poland. (2016). OECD Economic Surveys.  Web.

  21. OECD Statistics. (2017). OECD Statistics. OECD.

  22. Poland Dependency Ratios. (2017) IndexMundi: World Factbook. Retrieved from.

  23. Poland Labor Force Participation Rate 1998-2017. (2017). Trading Economics. Trading Economics,

  24. Porter, M. Sachs, J. McArthur, J. (2002). "Executive Summary: Competitiveness and Stages of Economic Development." The Global Competitiveness Report 2001-2002 16(25). World Economic Forum. Web.

  25. Pruchnik, K. Toborowicz,J . (2014). Low Level of Innovativeness and the Middle-Income Trap Polish Case Study. Journal of Entrepreneurship, Management and Innovation 10(2), 141-57. Web.

  26. Radwan, I. (2014). "Avoiding the Middle-Income Trap in Poland." World Bank, 19 Aug. Web.

  27. Rostow, W. W. (1959). The Stages of Economic Growth. The Economic History Review, 12, 1–16.

  28. Rostow, W. W. (1990). The Stages of Economic Growth: A Non-communist Manifesto. Cambridge University Press.

  29. Sutz, J. (2012). Measuring Innovation in Developing Countries: Some suggestions to achieve more accurate and useful indicators. International Journal of Technological Learning. 5. 40 - 57.

  30. Syverson, C. (2011). What Determines Productivity? Journal of Economic Literature, 49 (2): 326-65.

  31. Szymański, D. (2017). "Plan Morawieckiego Na Razie Tylko Na Papierze. Polska Z Najgorszym Wynikiem Od 1996 R." Business Insider Polska. Business Insider, 01 Aug. Web.

  32. Van Biesebroeck, J. (2007).Robustness of Productivity Estimates. The Journal of Industrial Economics, 55: 529–569.

  33. Woo, Jung-Yeop; Uk Heo. (2009). Corruption and Foreign Direct Investment Attractiveness in Asia." Asian Politics & Policy 1.2 223-38.

  34. Workman, D. (2017). "Poland's Top 10 Exports." World's Top Exports. 12 October. Web.

  35. World Bank Annual Report. (2015). Washington DC. Web.

  36. Yusuf, S. Nabeshima, K. (2009). Tiger economies under threat: a comparative analysis of Malaysia's industrial prospects and policy options. Washington, DC: World Bank. Web.

  37. Zhang, L. Yi, H.; Luo, R. Liu, C. Rozelle, S. (2013). The Human Capital Roots of the Middle-Income Trap: The Case of China. Agricultural Economics 44 (1), 151-62.

About Us

The Asian Institute of Research is an online and open-access platform to publish recent research and articles of scholars worldwide. Founded in 2018 and based in Indonesia, the Institute serves as a platform for academics, educators, scholars, and students from Asia and around the world, to connect with one another. The Institute disseminates research that is proven or predicted to be of significant influence for the general public.

Contact Us

Please send all inquiries to the email:

Business Address:

5th Floor, Kavling 507, Fajar Graha Pena Tower, Jl. Urip Sumohardjo No.20, Makassar, Indonesia 90234

Copyright © 2018 The Asian Institute of Research. All rights reserved

Stay Connected

  • Instagram - Black Circle
  • Facebook - Black Circle
  • LinkedIn - Black Circle