ANOTHER CASE OF THE MIDDLE-INCOME TRAP: CHILE, 1900–1939. (March 2022)

• Record Type: Journal Article
• Authors: Couyoumdjian, Juan Pablo; Larroulet, Cristián; Díaz, Diego A.
• Is Part Of: Revista de historia económica. Volume 40:Number 1(2022)
• Page Start: 5
• Page End: 33
• Publication Date: 2022-03
• Subjects: economic and institutional change -- middle-income trap -- Chile; O47 -- 43 -- O54; Cambio económico e institucional -- Trampa del ingreso medio -- Chile; Economic history -- Periodicals; Economics -- Periodicals; Spain -- Economic conditions -- Periodicals; 330.05
• DOI: 10.1017/S0212610920000221
• Languages: English
• ISSNs: 0212-6109

Abstract

ABSTRACT: This paper studies the evolution of the Chilean economy in the late 19 th and early 20 th century, a period when the country's convergence with developed countries came to an end. We analyse this problem in the context of the modern literature on the middle-income trap. The social, political and economic history of Chile between 1875 and 1939 is examined and the presence of most of the factors associated with the middle-income trap is found. We complement this narrative through a quantitative analysis based on the synthetic control method and argue that the process of state-led industrialisation undertaken in the country leading to the formation of CORFO was a key economic and political event. Our work presents some general lessons for developing countries facing a similar context.