Seoul Journal of Economics - Vol. 32 , No. 1

[ Article ]
Seoul Journal of Economics - Vol. 32, No. 1, pp.63-82
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2019
Received 03 Jul 2018 Revised 31 Dec 2018 Accepted 04 Jan 2019

Can Turkey Escape from the Middle-Income Trap? What Has Been Done? What Can Be Done? Lessons from South Korea
Mustafa Malkoç YAŞAR
Mustafa Malkoç YAŞAR, Ph.D. Candidate and Research Assistant at Department of Economics, Giresun University, Turkey, Tel: +905444833753 (malkocyasar@gmail.com)
Former Visiting Researcher at Seoul National University, Seoul, Korea

JEL Classification: O10, O21, O52, O53


Turkey has been a middle-income country for nearly half a century. Unlike Turkey, South Korea has managed to rapidly grow and become a high-income country. The success of South Korea may be an inspiration for many developing countries that cannot move from the middle-income trap, such as Turkey. This qualitative study focuses on the dynamics of development in both countries. Population, education, foreign trade, and R&D policies since 1953 are examined. Lessons from South Korea show that upgrading exports from low and middle tech to high tech is crucial for economic development.

Keywords: Middle-Income trap, Turkey, Korea, Economic planning


The author acknowledges the idea of publishing a special issue and the valuable comments from Prof. Dr. Keun Lee who is the editor of this journal. Special thanks are due to Prof. Dr. Keun Lee for his hospitability, support, and encouragement during a year of stay at Seoul National University. Seminars organized by Prof. Lee, which were held in Department of Economics and Center for Economic Catch-up, have considerably influenced the author for creating new horizons. The author is also grateful for the organization, especially to Prof. Dr. Keun Lee and Dr. Won Jin Song, during and after the conference held on June 23–24, 2017 in Jeju Island.

1. Aghion, P. and P. Howitt. “A Model of Growth through Creative Destruction.” Econometrica 60 (No. 2 1992): 323-351.
2. Bozkurt, E., S. Bedir, D. Özdemir, and E. Çakmak. “Middle Income Trap and the Case of Turkey.” Maliye Dergisi (No. 167 2014): 22-39. (In Turkish)
3. Bulman, David, Maya Eden, and Ha Nguyen. Transitioning from Low-income Growth to High-Income Growth – Is There a Middle Income Trap? World Bank Policy Research Working Paper No. 7104, 2014.
4. Council of Higher Education of Turkey (CHE), 2018. (In Turkish) Available at: http://www.yok.gov.tr/web/guest/universitelerimiz.
5. Chu, K. “Economic Development and Human Capital Formation in Korea.” In J. K. Sung (ed.), Development Experience of the Korean Economy. Seoul, South Korea: Kyung Hee University Press, pp. 379-415, 2010.
6. Doğan, M. “General Overview of the Population Policy in Turkey.” Marmara Coğrafya Dergisi (No. 23 2011): 293-307. (In Turkish)
7. Eichengreen, B., D. Park, and K. Shin. “When Fast-Growing Economies Slow Down: International Evidence and Implications for China.” Asian Economic Papers 11 (No. 1 2012): 42-87.
8. Gill, I. S. and H. Kharas. An East Asian Renaissance: Ideas for Economic Growth. Washington: The World Bank, 2007.
9. Gill, I. S. and H. Kharas. The Middle-Income Trap Turns Ten. World Bank Policy Research Working Paper No. 7403, 2015.
10. Glawe, L. and H. Wagner. “The Middle-Income Trap: Definitions, Theories and Countries Concerned—A Literature Survey.” Comparative Economic Studies 58 (No. 4 2016): 507-538.
11. Grossman, G. M. and E. Helpman “Trade, Innovation, and Growth.” The American Economic Review 80 (No. 2 1990): 86–91.
12. Günay, D. and A. Günay. “Quantitative Developments in Turkish Higher Education since 1933.” Journal of Higher Education & Science/Yüksekögretim ve Bilim Dergisi 1 (No. 1 2011): 1-22. (In Turkish)
13. Kanchoochat, V. “The Middle-Income Trap Debate: Taking Stock, Looking Ahead.” Kokusai Mondai (International Affairs) (No. 633 2014): 1-19.
14. Kasenda, D. “Can Asian Developing Countries Stuck in a Middle Income Trap Learn From South Korea’s Economic Development Experience?” Global Development Network KOICA Development Research Award Second Prize, 2014. Available at: http://www.gdn.int/sites/default/files/2nd%20Prize_88_Daniel%20Kasenda(1).pdf.
15. Kesgingöz, H. and S. Dilek. “Middle Income Trap and Turkey.” The Empirical Economic Letters 15 (No. 7 2016): 657-666.
16. Kharas, H. and H. Kohli. “What is the Middle Income Trap, Why do Countries Fall into It, and How can It be Avoided?” Global Journal of Emerging Market Economies 3 (No. 3 2011): 281-289.
17. Kim, Chonggui. The Structure of the Korean Economy on the 2000 Input-Output Tables. Paper presented at Intermediate Input-Output Conference, Brussels, Belgium. September 2-4, 2004.
18. Kim, D. H. “Korea’s Five Year Economic Development Plans: Targets, Performance and Overall Assessment.” In J. K. Sung (ed.), Development Experience of the Korean Economy. Seoul, South Korea: Kyung Hee University Press, pp. 23-50, 2010a.
19. Kim, D. H. “Outward-looking Development Strategy in the 1960s.” In J. K. Sung (ed.), Development Experience of the Korean Economy. Seoul, South Korea: Kyung Hee University Press, pp. 79-101, 2010b.
20. Koçak, E. and Ü. Bulut. “Middle-Income Trap: Theoretical Framework, Empirical Approaches and an Econometric Application on Turkey.” Maliye Dergisi (No. 167 2014): 1-21. (In Turkish)
21. KOSIS, Korean Statistical Information Service, 2017. Available at: http://kosis.kr.
22. Lee, Keun. Schumpeterian Analysis of Economic Catch-up. Cambridge, UK: Cambridge University Press, 2013.
23. Lee, Keun. Economic Catch-up and Technological Leapfrogging. Cheltenham, UK: Edward Elgar Publishing, 2016.
24. Lucas, R. E. “On the Mechanics of Economic Development.” Journal of Monetary Economics 22 (No. 1 1988): 3-42.
25. Mıhçı, H. “Escape Movement of Relative Backwardness and Planned Development Experience in Turkey (1963-1983).” Mülkiye Dergisi 25 (No. 231 2001): 149-196. (In Turkish)
26. Ministry of Education of South Korea. Education in Korea. Seongnam: Ministry of Education, 2016.
27. OECD. Programme for International Student Assessment, 2018. Available at: http://www.oecd.org/pisa/test/.
28. Ohno, K. “Avoiding the Middle-Income Trap: Renovating Industrial Policy Formulation in Vietnam.” ASEAN Economic Bulletin 26 (No. 1 2009): 25-43.
29. Rebelo, S. “Long-Run Policy Analysis and Long-Run Growth.” Journal of Political Economy 99 (No. 3 1991): 500-521.
30. Romer, P. M. “Endogenous Technological Change.” Journal of Political Economy 98 (No. 5 1990): S71-S102.
31. Solow, R. M. “Technical Change and the Aggregate Production Function.” The Review of Economics and Statistics 39 (No. 3 1957): 312-320.
32. Soyak, A. “Economic Planning in Turkey: Is There a Need for the State Planning Organization?” Doğuş Üniversitesi Dergisi 4 (No. 2 2003): 167-182. (In Turkish)
33. Sung, J. K. “Was There an Economic Miracle in Korea.” In J. K. Sung (ed.), Development Experience of the Korean Economy. Seoul, South Korea: Kyung Hee University Press, pp. 11-20, 2010.
34. Turkish Exporters Assembly (TEA). 2012. (In Turkish) Available at: http://www.tim.org.tr/tr/tim-gundem-tim-ithalatin-sebebin-inihracat-oldugu-bir-sehir-efsanesidir.html.
35. Times Higher Education, World University Rankings, 2018. Available at: https://www.timeshighereducation.com/world-university-rankings/2019/world-ranking.
36. Tuncel, C. O. “Middle-Income Trap and Innovation Policies: East Asian Experience and Lessons for Turkey.” Maliye Dergisi (No. 167 2014): 40-70. (In Turkish)
37. TURKSTAT (Turkish Statistical Institute), 2017. Available at: http://www.turkstat.gov.tr/.
38. UNESCO. UNESCO Institute for Statics, 2018. Available at: http://data.uis.unesco.org.
39. USPTO. Patent Counts by Country, 2017. Available at: https://www.uspto.gov/web/offices/ac/ido/oeip/taf/cst_all.htm.
40. Whang, In-Joung. Korean National Family Planning Program. East-West Resource Systems Institute East-West Center Paper, 1981.
41. Wong, C. and H. Fung. “Caught-In or Breaking-Free from the Middle Income Trap: The Case of Malaysia.” Seoul Journal of Economics 32 (No. 1 2019): 1-22.
42. World Bank. World Bank Country and Lending Groups, 2018a. Available at: https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.
43. World Bank. World Bank Open Data, 2018b. Available at: http://data.worldbank.org/.
44. World Bank. China 2030: Building a Modern, Harmonious, and Creative High-Income Society. Washington: The World Bank, 2013.
45. Yeldan, E., K. Taşçı, E. Voyvoda, and M. E. Özsan. Escaping From Middle Income Trap: Which Turkey? Macro, Regional and Sectoral Analyze. Vol. 1, Istanbul: TÜRKONFED, 2012. (In Turkish)
46. Yeldan, E., K. Taşçı, E. Voyvoda, and M. E. Özsan. Escaping From Middle Income Trap: Which Turkey? Regional Development and Strategies for Avoid Dual Trap. Vol. 2, Istanbul: TÜRKONFED, 2013. (In Turkish)
47. Yılmaz, Gökhan. Turkish Middle Income Trap and Less Skilled Human Capital. Central Bank of the Republic of Turkey. Working Paper No 14/30, 2014.