World Development Report 2024: Creative Destruction and the Middle-Income Trap

Description

Over the past three decades, only 31 middle-income countries have transitioned to high income. How can the 108 countries that are currently at the middle stage of development avoid the "middle-income trap" and become highly developed? Building on 30 years of analysis, World Development Report 2024 sets out three guiding principles for policies that countries at the middle stage of development will need for growth (i) to become more sophisticated by making the most of knowledge diffusion and imitating at scale; (ii) to promote a contestable economy that facilitates greater economic and social mobility; and (iii) to effectively discipline incumbent firms and economic elites through market regulations that allow innovation to thrive.

The report will analyze these principles through the forces of creative destruction that shape the transformation of enterprises, expectations of the middle class, and the portfolio of energy sources. The report's framework will propose how the forces of creation (from both entrants and incumbent firms), destruction (of outdated arrangements), and preservation (of existing norms and institutions) can be balanced to speed up progress.