Institutional Quality, Economic Growth, and Middle-Income Trap: Evidence From Cross-Country Data

This study aims to investigate the institutional factors that contribute to helping countries successfully escape the middle-income trap, focusing on the aspect of institutional quality. The results indicate that the quality of institutions has a substantial and favorable effect on enhancing economies' capacity to overcome the middle-income trap. In addition, the examination of institutional quality reveals that factors such as anti-corruption, government efficiency, social stability, rule of law, democracy, and market regulation all contribute positively to an economy's capacity to overcome the middle-income trap. Therefore, to enhance the likelihood of late-developing economies overcoming the middle-income trap, governments should strengthen their reform endeavors and enhance the caliber of regional institutions.