This chapter summarizes the key findings of this volume; locates these findings within the existing literatures on law and development and related fields; highlights areas for further research; and develops policy recommendations for middle-income country (MIC) governments and development agencies. The discussion is organized around the eight issue areas set forth in the introduction: (1) Is “middle-income country” an analytically useful category? (2) Is there a middle-income trap, are there various traps, or is it a myth? (3) What if anything do successful MICs share? (4) Why have East Asian states been so successful, and does the recent success of Central and Eastern European (CEE) states provide an alternative model? (5) What is the relationship between politics, or political-economy, and development in MICs? (6) How have MICs been influenced by and adapted to the new international economic order? (7) What approaches are available to MICs to address pressing socioeconomic issues? And finally, (8) what lessons are there for policy makers and development agencies in promoting rule of law and good governance in MICs? We conclude with some recommendations for future research.

IS “MIDDLE-INCOME COUNTRY” AN ANALYTICALLY USEFUL CATEGORY?

There are both quantitative and qualitative arguments in favor of MICs as a useful analytical category or concept. There is a well-established correlation between wealth, good governance, rule of law, the protection of human rights, and other indicators of human well-being. Nevertheless, sorting countries by levels of wealth provides additional insights because the relationship is not uniform at all levels of the income scale. Table 16.1 provides correlations between per capita income, the Governance Indicators of the World Bank, along with the Human Development Index and selected other indicators. Consistent with other work, we see strong overall correlations when all countries are included in the analysis (column 1). When one breaks down the correlations by income class, however, one sees differential links at different levels of income. The correlation coefficients are highest at the middle-income level, and the relationships are more significant. Dividing the MIC category into upper middle-income countries (UMICs) and lower middle-income countries (LMICs) provides further dividends. Again the correlation coefficients are higher at the lower level of wealth, that is, for LMICs than for UMICs, with equal or greater levels of significance.

In 1960, there were 101 middle-income countries (MICs). By 2008, only thirteen had become high-income countries (HICs). Why do so many MICs fail to develop after a promising start, becoming mired in the so-called middle-income trap?

This volume addresses the special challenges MICs confront from a theoretical and a practical perspective. These challenges include maintaining sustainable economic growth while curbing rising income inequality and environmental degradation; creating social safety nets to protect those disadvantaged by economic reforms and globalization; reducing financial volatility and avoiding the crises that have frequently followed in the wake of financial liberalization; combating corruption; meeting Millennium Development Goals (MDGs) such as adequate health care, free primary education, and poverty alleviation; building the institutional capacity required for effective governance and a market economy; and maintaining social and political stability in the face of rising expectations and demands on the state.

This is the first volume on MICs that addresses law and development issues from the perspective of political, administrative, and legal institutions and policies. Most of the existing literature that specifically discusses MICs, including empirical studies that sort by levels of wealth and distinguish between low-income countries (LICs), MICs, and HICs, is by economists or development specialists. There are many articles, for example, on international trade, foreign investment, financing and the banking sector, fiscal policy and currency exchange, technology transfer, and taxation, as well as traditional development topics such as infra- structure, rural development, urban planning, the environment, social welfare systems, and health care.