Munich Personal RePEc Archive

“Middle Income Trap”; the position of Algerian economy: a comparative analysis overview

Allaoui, Elhassen and Tidjani, Chemseddine and Lacheheb, Miloud (2015): “Middle Income Trap”; the position of Algerian economy: a comparative analysis overview. Published in: International Journal of Economics, Finance and Management Sciences , Vol. Vol. 3, No. No. 4 (17 June 2015): pp. 337-346.

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Abstract

Economic history has shown that few middle-income countries have successfully attained high-income level.Effective transition from middle to high-income level requires an efficient resource use, private sector improvement, productivity enhancement, and technology based rather than labor based production. Failure of doing so, undoubtedly, leads to income trap, whereas a country caught in middle-income level for a long period. Therefore, this paper attempts to highlight the Algerian economy patterns since its independence to current position with regard to middle-income trap criteria, likewise, reasoning the causes that headed Algeria to middle income trap for over 30 years. Moreover, this paper goes further ahead in cross-country evidence of how Algeria compares with peer countries from MENA region. Likewise our results shows that the Algerian economy has better position than Egypt and Yemen. However, Algeria is still behind UAE that classified in high-income level, where Algeria has known a slow growth rate during the last 50 years. Finally, remedies are suggested as a way out from Middle-income trap, and to promote high growth rate in order to achieve high-income level in the future.

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