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Many works have been written on the middle-income trap as one of the biggest challenges for emerging states, most of which are middle-income countries (refer to Chap. 1). In the Asian Development Bank's (ADB's) Asia 2050 report, the authors warn that even the Asian emerging states that have had the strongest economic performances may be in danger of falling into the trap. They believe that outside of Asia, some countries have already fallen into the trap; they cite Brazil and South Africa as the typically trapped countries (Kohli et al. 2011, p. 54). As many other emerging states in Latin America have development patterns similar to that of Brazil, they may also have fallen into economic difficulty. The purpose of this chapter is to analyze the pattern of the economic development of the emerging states in Latin America in comparison with their counterparts in Asia and to elucidate why the economic performance of the emerging states in Latin America has differed from that of Asia. In the first section, I use the long-term data on the size of each country's gross domestic product (GDP) per capita relative to that of the United States to examine each country's catchup speed with the advanced industrial countries. The data reveal that the performance of Latin American countries in terms of catchup speed has been by far slower than that of their Asian counterparts. In Sect. 4.2, I then examine immediately observable (first-order), mostly economic causes of Latin America's poor economic performance by focusing on each country's changing sectoral competitiveness. I illustrate that Latin American countries increasingly depend on natural resource and resource-processing sectors, whereas Asian countries have seen the expansion of machinery industries with higher value added. In Sect. 4.3, I deepen the analysis by looking into the second-order (political economy) causes of the difference in their performance. I examine why Latin America has been deepening its dependence on natural resources, and I point out low research and development

This chapter defines and identifies twenty-eight "emerging states" and depicts the general patterns of their economic development and sociopolitical change in relation to institutional and economic globalization. These emerging states have been able to benefit from economic globalization but have avoided being constrained by institutional globalization because they have been able to attract global traders and investors by offering advantages, such as large domestic markets, abundant natural resources, appropriate technological capability, or a combination thereof. In the final analysis, however, upgrading the technological capability of domestic firms and labor and strengthening domestic production linkages will be crucial for the emerging states to further advance economically. They will also need to enhance redistributive measures and reinforce social linkages by narrowing the gap between the globally integrated populations and regions and those that are left behind. Both kinds of linkage strengthening require the close coordination of interests among economic and social forces such as large enterprises, local suppliers, workers, the middle class, and disadvantaged people. This chapter argues that the successful coordination of such interests requires the involvement of public institutions and is deeply affected by firm-government relations, middle-class conservatism, populist mobilization, institutional and ideational legacies from the past, and political leadership for institution-and coalition-building. These topics should be among the priority areas of scholarship for future emerging-state studies.

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