Innovation and Inclusion in Latin America ─ Strategies to Avoid the Middle-Income Trap

This book argues that Latin America must confront two main challenges: greater innovation to increase productivity, and greater inclusion to incorporate more of the population into the benefits of economic growth. These two tasks are interrelated, and both require greater institutional capacity to facilitate both innovation and inclusion. Most countries in Latin America are struggling to escape what economists label “the middle income trap.” While much if not all of the region has emerged from low income status, neither growth nor productivity has increased sufficiently to enable Latin America to narrow the gap separating it from the world’s most developed economies. Although income inequality has diminished across much of the region in recent years, social vulnerability remains widespread and institutional weaknesses continue to plague efforts to achieve equitable development. This volume identifies lessons that can be learned and adapted from experiences within the region and in East Asia, where the middle income trap has largely been avoided.

This book is the result of a collaborative project undertaken by American University’s Center for Latin American & Latino Studies (CLALS) and the Corporation for Latin American Studies (CIEPLAN) in Chile, with financial support from the Inter-American Development Bank’s Office of Strategic Planning and Development Effectiveness.

Alejandro Foxley is the president and co-founder of CIEPLAN, a think tank based in Santiago, Chile, and the author or editor of over 15 books on economics, economic development, and democracy. Foxley previously served in the Republic of Chile as Minister of Foreign Affairs (2006–2009), Senator (1998-2006), and Minister of Finance (1990-1994), during which time he concurrently served as a governor of the Inter-American Development Bank and the World Bank.

Barbara Stallings is the William R. Rhodes Research Professor at the Watson Institute for International and Public Affairs at Brown University, USA, where she previously served as director. She is also the editor ofStudies in Comparative International Development, and a 2013-2014 Research Fellow at American University’s Center for Latin American & Latino Studies (CLALS), USA. Stallings has a PhD in economics from Cambridge University, UK, and a PhD in political science from Stanford University, USA. She is author or editor of 12 books and numerous book chapters and articles.