Abstract:
This paper focuses on the case of Bangladesh as an example of a country
that is at risk of falling into the ‘middle income trap’, in other words the risk that
a country that has attained middle income levels will then be unable to join the
club of developed countries. This paper uses the theory of Unequal Exchange from
the Dependency School to understand the middle income trap in Bangladesh and
further argues that the ideas of productivity, competitiveness and technological
change derived from orthodox economic thinking are not useful in understanding
growth prospects and policy responses in contemporary middle income countries.
Alternately, the paper explains the role of structural change as a means of
sustaining growth in middle income countries.
