That question ran through a talk I gave last week in Colombo, Sri Lanka. My answer is that it will not be easier. Not unless we reframe development itself: not by drawing up yet another list of goals, but by changing how we see development, how we imagine it, and how we shape it.

The alternative is the loop we are already in, where each round of aspirations is set high, missed, and reset. The SDG scorecard says only 18 percent of targets are on track. Reframing is how we break the loop rather than restart it.

This post makes the case in three parts.

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Seeing development

Three things are true at once. And any honest picture of development needs to hold all three together.

Long-term progress

Over the long course of history, every world region has seen sustained gains in income per person, as the Maddison Project Database shows. Literacy rates have climbed and child mortality has collapsed across all developing regions as the World Development Indicators show. The Human Development Index has risen almost everywhere.

A large unfinished agenda

But the unfinished agenda is enormous. Nine in ten people still live in regions where income per person is below 40 percent of the frontier, represented here by the so-called “Western offshoots” of the United States, Canada, Australia and New Zealand.1

Asia-Pacific alone spans the world’s widest range of gross national income per person, from Singapore to Afghanistan. The spread in human development also remains very wide. As the chart below illustrates, the Human Development Index shows very large variations between income groups (horizontal bars) and within them (vertical beeswarms), let alone within individual countries (not shown here).

And the Sustainable Development Goals, the world’s development scorecards, tell us that our collective aspirations remain far unmet: only 18 percent of targets are on track, while more than a third are stagnating or regressing.

A more turbulent development landscape

At the same time, the development landscape is getting more turbulent. In the World Economic Forum’s latest risk survey, 62 percent of respondents expect the next decade to be stormy or turbulent. Only 8 percent expect it to be stable or calm.

The risks cluster into three groups: headwinds to growth and jobs (debt distress, demographic shifts, technological change, slower globalization), existential threats (climate, biodiversity, pandemics, antimicrobial resistance), and growing governance risks (democratic backsliding, state capture, polarization, disinformation). This is the risk landscape we mapped in the 2024 Regional Human Development Report.

Seeing development clearly means refusing to choose only one of these stories.

Imagining development

The second move is to look at the forces reshaping the world without the reflex of crisis. Crisis language narrows our vision. Opportunity thinking keeps more possibilities open. We need more imagination to envision opportunity.

The big picture

One big but overlooked news item is that in 2026 the world is projected to reach Peak Middle Income. Middle-income countries are home to about 6 billion people today, and that number is now set to fall as countries graduate upward, to around 5.4 billion by 2050.

Underneath this lies what I have called the Great Income Inversion. In 1990, seven in ten people lived in the poorer half of the World Bank’s classification. By 2050, seven in ten will live in the richer half. The low-income share of world population is projected to fall from 58 percent to 7 percent.

Countries do not climb at the same pace. China moved from low income to the doorstep of high income in four decades, and will likely cross that high-income threshold in 2026. India is on a slower path, reaching upper-middle status around 2036, roughly three times slower than China over the comparable stretch.

The world getting richer, at least on average and into the longer term, will present opportunity for those who reap it.

But what about the disruptors? I would like to a the thay as serious as many of them may be, each of them can be cast under a different light. I will illustrate this by providing examples of three megatrends that need a reframe

Demography

In addition to Peak Middle Income, the world is reaching also another peak: Peak Youth. The under-25 population will plateau around 2030 while the 60-plus population is projected to triple by 2100 (UN World Population Prospects 2024). The typology of pre-, early-, late- and post-dividend countries that we developed in the Global Monitoring Report 2015/16 still holds and we continue to see enormous diversity in patterns of demographic change around the world.

One reason why we need to reimagine demographics is that our instinct is to treat population aging as a burden. Yet, healthy aging and policies that expand labor supply can offset much of the demographic drag on growth. We need a new lens on aging itself. Longer lives with vitality and purpose, plus a growing health and care economy, are good things, not merely problems to manage.

It is time we stop treating demography as an economic funeral.

Technology

As argued in our recent The Next Great Divergence report on AI and widening inequality between countries, we have a long history of framing technology as hysteria and hype. Some 2,500 years ago, Socrates feared writing would ruin our memory. More recently, Edison confidently predicted film would make books obsolete. Both fears turned out to be wrong, although perhaps not entirely.

Today we are living in an era of unprecedented rapid technological change with AI taking currently center stage. But the global conversation on AI needs more balance and humility. It also needs a broader perspective and it needs greater attention to inequality between countries rather than only within them.

Furthermore, when it comes to the fear that technology destroys employment, history suggests we should place at least as much emphasis on whether demand expands as on the labor-saving effects of technology itself.

Globalization

It is not correct to speak of deglobalization. Trade as a share of GDP remains high almost everywhere, and further integration remains possible, including also in markets and market segments that have seen less globalization (such as labor markets and trade in services).

What we see is disglobalization: a slowdown in momentum, or a slowing of the pace of economic integration across borders, not a retreat in levels.

Meanwhile, the scale of opportunity keeps rising in absolute terms. In 2007, China grew at 14 percent and added around 500 billion dollars to world output. Today it grows at roughly 4.5 percent, but on a base near 20 trillion dollars, which adds about 870 billion dollars.

A slower growth rate, in other words, does not necessarily mean a smaller contribution to global growth.

Shaping development

The third move is about what to do. Three facts set the stage.

Three facts

People feel economically insecure. In the World Values Survey, large majorities of the adult population in Pakistan, Viet Nam, Myanmar, the Philippines, Indonesia and Malaysia say they worry “very much” about losing or not finding work. Any development model that does not put jobs at the center will fail the people it is meant to serve.

Growth may not be sufficient, but it is absolutely necessary.2 There is no country in the world that has managed to achieve high levels of material wellbeing without sustained growth over an extended period of time. And if we look at the sheer range of the income classification, most of the world still has a long distance to travel.

Slow and steady wins the race. The historical record since 1950 shows that rich countries do not necessarily grow faster than poor ones in good years. They tend to shrink less often and less deeply in bad ones. Predictable policy that avoids reversals is worth more than bursts of speed.

Three redirections

From these facts, among others, follow three redirections that the development model of the future will need to satisfy.

• Place people at the heart of development. Human development concepts are well developed but poorly mainstreamed. A systemic reset would enlarge people’s choices, build stronger human security through social protection, health, risk-informed development and food security, and meet obligations to future generations through the energy transition, climate resilience, nature protection and sound public finances.

• Pursue smarter forms of growth. The call for growth should be louder, not quieter. But not jobless, ruthless, voiceless, rootless or futureless growth. Export-led strategies need a change of tack. Domestic markets deserve more attention. New sources of growth lie in agriculture, services, the green, blue and care economies, and technology directed towards development outcomes.

• Emphasize the politics of reform and the art of delivery. The most common objection to any of this is “if it hasn’t happened in the past, why would it in the future?” This is why the third redirection is the most important. We need to shift emphasis from diagnostics and laundry lists of technocratic solutions to the politics of reform and the art of delivery. Real change is and always has been rooted in leadership and governance. Neither is fixed. Political will can be nurtured. And governance can be optimized to become more anticipatory, adaptable and agile, three attributes that often determine whether countries succeed or fail.3

Where this leaves us

Development seen whole is a story of real progress, an enormous unfinished agenda, and rising turbulence. Development imagined without the crisis reflex helps us see demographic, technological and trade shifts as opportunities as well as sources of disruption.

And development shaped around people, smarter growth and a laser focus on making change actually happen gives us a fighting chance of breaking the cycle of missed development goals.

Note

The full slide deck is here:

Reframing Development Philip Schellekens Sep 2026

3.27MB ∙ PDF file

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The Moving Escalator is a series about four decades of movement through the World Bank’s country income classification, where the world is heading by 2050, and whether the classification itself remains fit for purpose. This is Post 5.

If you were to treat the world as one country, that country is nowcast to cross the World Bank’s high-income threshold in 2026. In other words, the planet is about to become rich.1

For the entire history of the income classification, going back to 1987, the world’s average per capita income corresponded to the upper-middle-income band. But no more: 2026 is likely to be the world’s “graduation year.”2

Is that worth celebrating?

Not really. And that’s the point of this post: the average GNI per capita figure is spread over eight billion people and tells us little about the world most people actually live in. Two in three people live in countries with per capita income levels below that global average.

The distribution-blind income classification of the World Bank can only detect one type of skew behind this global average: the differences in per capita income across countries. Inequality within countries is a second source of skew, which I will discuss in the next post. And that turns out to be far enough: the span between the richest and poorest country on earth is 600x — much larger than what can be observed within any country.

The world turns rich long before the median person’s country does

So let’s examine between-country inequality in per capita income levels. The previous chart contains a second line: GNI per capita in the median person’s country.3

We can see that while the world average is high income, the median person’s country is upper-middle income. Median per capita income saw a considerable rise until the early 2010s. It crossed the lower-middle and upper-middle income lines in 1998 and 2010 respectively, when in both cases China represented the median person’s country. This later shifted to Indonesia as China continued to grow.

Now extend both lines forward. The average crosses the high-income line in 2026. The median line does not reach it even by 2050, the end of the projection horizon. The average will have “graduated” but the median will take considerably longer.

Today the distance between mean and median is about the width of an entire income bucket and the chart below shows how the ratio between mean and median, a measure of skewness, has evolved over time.

Three results to note:

• Between-country inequality declined massively from 1991 to 2012. The mean-to-median ratio fell almost sevenfold, from 12.7x to 1.9x. China's rise through the middle of the distribution accounted for much of the decline.

• The ratio rebounded after 2015. The collapse in commodity prices reduced the dollar-denominated GNI per capita of many commodity exporters.

• The ratio now stands at around 3x and is projected to remain broadly flat through 2050.

If the world were a country, it would be a very strange one

To further illustrate the extent of between-country inequality today, let’s take a deeper look at the 2026 nowcast and treat the world as one country with an internal income distribution.

Half of the global population lives in countries which capture just 9% of world income. Conversely, the richest tenth of the global population, ranked by GNI per capita of the country they live in, captures 49% of world income. The world average, nowcast at $14,801 for 2026, is at the 64th percentile of the ranked distribution.

Being average is therefore quite clearly an “above-median experience”: 64% of humanity, 5.2 billion people, live in a country poorer than the world average. And together they hold just 17% of world GNI in aggregate terms.

The 5.2 billion below the average are far from homogeneous. Per capita income levels vary widely across the countries they live in.

Finally, let’s zoom in further to the country level to see the full range of between-country inequality. Among 197 ranked economies, Burundi is the poorest and Bermuda the richest, with a roughly 600-fold gap between them.

Think of what this means for our “newly minted high-income country” called World. No real country comes close to an internal division of this 600-fold magnitude. Across the world’s large economies, the gap between the richest and poorest region runs from about 2-fold in Germany and 5-fold in the United States, through roughly 10-to-15-fold in India and Indonesia, to the world record: the 43-fold gap between Russia’s Arctic oil districts and Ingushetia.4

A graduation nobody will notice

When a real country “graduates” to high income, things change. Concessional finance may be affected. Aid eligibility is likely to narrow. Trade preferences will be less generous.

So what kind of club is the world joining?

If we draw the four income bands in plain dollars and look for the poorer world, it is almost a struggle to find it. The low, lower-middle and upper-middle bands together cover less than a tenth of the axis. We squeeze into that sliver every country below the high-income line and with them the large majority of humanity. The high-income band takes the rest of the picture, and it has no ceiling.

The dollar chart is really what allows people to declare with a straight face that the world has become “rich.” And that’s precisely possible because the poorer world barely features in this visualization.

What if we “bend” the ruler?

Take a log scale and the bottom stretches out and the top compresses. Logs are also more natural for measuring the effort it takes to travel across the bands as equal distances represent equal growth efforts, at least arithmetically. But above all, with logs we can see the sheer diversity within the group below the line.

The bottom line is that the world crosses this year at the very bottom of the high-income band. Above this doorstep, inequality continues to run on and the classification stops measuring the differences at the top because the highest category is the “terminal” one — which is in and of itself a problem as the top is becoming too crowded and too heterogeneous.

Below the doorstep lies the part of the distribution that is barely visible on the dollar scale: the countries where two in three people live, whose incomes are a full income bucket or more below where the world now officially stands.

So the world turns rich this year. On average. But most of the world does not.

What comes next

My next post takes the above analysis further to characterize within-country inequality through the lens of the country income classification. I will explore what part of humanity actually lives at living standards corresponding to each country income group in the classification. Some surprising results will emerge.

Stay tuned!

The Moving Escalator is a series on four decades of movement through the World Bank's country income classification, where the world is heading by 2050, and whether the classification remains fit for purpose. This is Post 4.

Two years ago in Washington DC, at the IMF/World Bank Annual Meetings, I heard the state of the global economy get diagnosed as:

• Low-income countries are in a poverty trap;

• Middle-income countries are in a middle-income trap;

• High-income countries face secular stagnation.

Every income bracket gets its own affliction and we can fit the whole world on one slide.1 I remember thinking that this is too neat.

The above speaks to a broader issue. Development loves its trios. There are countless examples of them: three pillars, three pathways, three solutions… And yes, this post has three examples.

There are good reasons for this. Simple frameworks are easy to remember. After all, what good is a complicated framework if nobody remembers or understands? A simple framework also gives a messy subject some structure, which is especially appreciated in the chaotic world of international development. By abstracting from the detail, we sometimes see the underlying patterns better.

That’s the idea. But simplicity can slide into “simplism.” We may oversimplify and remove the complexity that matters. Our frameworks can become straitjackets: rather than simply helping us see, they start telling us what we should see. This happens surprisingly often: a diagnosis developed for one country at one moment in time becomes a prescription for all countries at all times.

I will illustrate this with three well-known frameworks, all tied in different ways to the World Bank’s income classification. The first is the trio of traps as in the above. The second is “Grow, Invest, Insure”, the game plan to end extreme poverty. And the third is “Invest, Infuse, Innovate”, the 3i framework of the World Development Report 2024.

To set the tone right: all three contain useful ideas. Where they go wrong, in similar ways, is when those ideas become too tightly tied to the income classification. A statistical classification should not start doing the work of a development theory.

Each income bracket is in a different trap

Three afflictions in the form of a trap, one per income bracket. What could be wrong with that?

First, it is too tidy. In 2025, the income classification contained 87 high-income, 106 middle-income and 25 low-income countries. That is a large number of countries being asked to share a diagnosis. The middle-income group, for example, spans radically different economic structures, demographics, institutions, and geopolitical circumstances. Yet, by crossing a common and rather arbitrary threshold in GNI per capita, such countries all acquire the same predicament.

Second, it is too fatalistic. I have argued in a previous post (see below) that the middle-income trap should be retired for its conceptual flaws, lack of empirical basis, and harmful side effects. Countries do climb the income ladder at different speeds, and some take ages to cross the range of the income group they’re in. But a slow climb is a policy challenge, not a trap. The question is why progress is slow and what needs to change. The same applies at the bottom and the top: low-income countries face productivity and structural transformation challenges, while high-income countries face their own problems with productivity, demographics and fiscal pressures. Above all, this language of traps risks taking agency out of the equation precisely where agency matters most.

Third, it is too narrow. The entire framework is anchored to GNI per capita. This is useful for telling us roughly how much income an economy generates, on average, but that’s it. It says nothing about inequality, institutions, learning, security, women’s opportunities, service delivery, or sustainability. I would not dismiss income as irrelevant. It matters greatly, and it also correlates with many dimensions of development. But correlation is not the same as coverage. An income average is just part of the picture. It is not the full picture itself.

Social protection on the back burner for poor countries

The second framework is the World Bank’s three-pillar gameplan to end extreme poverty: “grow, invest, insure.” I cannot claim distance from this one as it featured prominently in a report I managed some years ago. The idea is to:

• Sustain broad-based growth that creates competitive economies and income-earning opportunities for the poor and the bottom 40 percent;

• Invest in human capital through health, education and early childhood development, so that vulnerable groups are able to participate in and benefit from growth;

• Protect the poor through social assistance, safety nets and formal insurance, so that shocks do not force desperate choices with irreversible consequences,

Who can argue with this?

The problem is what happened with the third pillar.

For decades, social protection was treated as a supplement, especially in poorer countries. The 1980 World Development Report noted that the scope for such programs in low-income countries was “necessarily limited.” As Gill, Revenga and Zeballos (2016) show, this evolved into the “two-and-a-half-point strategy,” with public assistance as the half pillar.

Only in 2016 did the World Bank formally make insurance a full pillar. Even then, the promotion came with conditions attached: countries were advised to expand social insurance only once extreme poverty had been reduced to low levels. For India, it was said that the time had not yet come.

Is it right to present social protection as a “graduation prize” that one earns by growing first?

And the old sequencing has not entirely disappeared today. Universal social protection is still to be approached “gradually,” as fiscal constraints allow, with affordability and targeting continuing to shape what poorer countries are expected to provide.2 The half pillar was retired in principle but it looks like it was kept on a retainer.

Also, the emphasis has recently shifted toward jobs. But jobs cannot substitute for protection against sickness, unemployment, old age and other shocks.

We should stop looking at social protection as merely a fiscal or technical issue. It is a human right and a foundation for inclusive development. It cushions shocks for those who work, supports those who cannot, enables families to invest in health and education, and builds resilience across generations.

Growth and jobs alone will not achieve lasting poverty reduction unless anchored in systems that protect people through life’s inevitable risks.

Don’t prioritize innovation when poor

My third example comes from the 2024 World Development Report and its answer to the imaginary middle-income trap: the 3i framework of “Invest, Infuse, Innovate.” It goes like this:

• Low-income countries should invest, accelerating the accumulation of physical capital and basic human capital to build foundational capabilities.

• Lower-middle-income countries should invest and infuse, complementing investment with the adoption and diffusion of technologies and business models from more advanced economies, through trade, FDI and integration into global value chains.

• Upper-middle-income countries should invest, infuse and innovate, pushing domestic firms toward the global knowledge frontier once the gains from imitation are exhausted.

As a way of explaining how the sources of growth might change as economies develop, this is useful. The problem starts when the framework is read as a sequence prescribed by income level. Should countries really wait for their income classification to change before moving on to the next "i" they need to prioritize?

Take India. It is a lower-middle-income country that has globally competitive firms and capabilities in software, pharmaceuticals and space. Would we really want to tell those firms to focus on infusion rather than innovation because the country's average income has not yet crossed a particular threshold?

Or take a low-income country such as Afghanistan. Why should a poor country wait before adopting technologies that offer the possibility of leapfrogging, whether in mobile payments, energy or digital services?

In reality, development does not follow a linear path. The most successful countries that climb up the income classification do not add these ingredients one bracket at a time. They combine them in different proportions, depending on what their economies need at different stages and in different sectors.

That is why I would use the 3i framework as a menu, not a ladder. The balance between investment, infusion and innovation should depend on the country's capabilities, sectors, institutions and opportunities, not simply on where its GNI per capita happens to fall.

Read before use

The simple trios add value and the intent is constructive. But each risks turning an income bracket into a diagnosis, and a diagnosis into a prescriptive destiny.

The trap framework files every country under the affliction of the income group to which it belongs. Grow, Invest, Insure has for too long treated social protection as a secondary concern for countries further down the income ladder. And the Invest, Infuse, Innovate framework converts a useful description of how growth strategies evolve into a prescription about what countries at a given income level should and should not prioritize.

We should stop the use and abuse of the income classification as a theory of development. The classification merely sorts countries. It does not diagnose, and it certainly need not prescribe.

So when we use the simple trios, let’s attach a warning label: Consume responsibly. The contents may oversimplify.

What comes next

My next two posts will look more deeply into the topic of global inequality through the lens of the country income classification. The first post will characterize between-country inequality whereas the second one will tackle the within-country inequality story utilizing new metrics of class-equivalent income lines.

Is the world becoming a more equal place?

Stay tuned for more!

The Moving Escalator is a series on four decades of movement through the World Bank’s country income classification, where the world is heading by 2050, and whether the classification remains fit for purpose. This is Post 3.

We often say countries risk “getting old before they get rich.” This post is about a development concept that got old before it got valid: the middle-income trap.

The full name is the middle-income country trap, or the MIC trap. The idea is that countries get stuck in their climb from middle to high-income levels, as defined by the thresholds of the World Bank’s country income classification. They get stuck because the policies and institutions that drove earlier growth no longer work as well, while the next set of growth drivers has yet to take hold.

There is a real problem here, but I don’t think “middle-income trap” is the right way to describe it. The concept is not conceptually sound and neither does the empirical evidence convincingly establish a distinctive middle-income trap.

Middle-income countries do face genuine policy challenges in sustaining and accelerating growth. But those challenges are not unique to middle-income countries, nor do they imply a common barrier at the middle of the country income distribution.

It is time to retire the Middle-Income Trap.

I will be make the case in five steps. First, a critique of the concept itself. Second, a look at how countries actually climb the middle-income ladder. This section is a little heavier on the data, so bear with me. Third, a review of the empirical literature on whether a middle-income trap exists. Fourth, a projection of what the global country income distribution might look like by 2050. Finally, an examination of the potential harm the concept itself might do, particularly when a contested idea becomes conventional wisdom.

A concept with two typos in its name

Before turning to the data, first consider the concept on its own terms.

There are two typos in the name.

• “Trap.” A trap implies a distinctive barrier from which countries struggle to escape. But the literature does not establish such a barrier. What middle-income countries face is a development problem that is pretty familiar: growth slows when existing sources of productivity run out, the low-hanging fruits of reform have been reaped, and new growth opportunities need to be found. Countries differ enormously in how they respond. This is no trap, but a policy challenge.

• “Middle-income.” The need to renew growth drivers does not stop at the high-income threshold nor does it exclude the low-income countries. Rich countries exhaust old growth models as anyone following the productivity debates in Europe or Japan can attest. And I can think of many growth challenges that apply to low-income countries too, not least those related to managing their demographic transition well. All countries need to adjust their growth model at different points in their development journey.

The originators of the concept have conceded both points. Revisiting their 2007 creation in “The Middle-Income Trap Turns Ten”, Indermit Gill and Homi Kharas write that the term refers to “a trap that can catch middle-income countries” and is “not a statement that middle-income countries are more likely to be trapped than other countries.” They add: “In retrospect, it would have been helpful to clarify this.”

It would have.

A decade later, the World Development Report 2024 put the trap on its cover anyway.

But by then, the concept was already deeply embedded in the language of politicians, policymakers and pundits, and had generated thousands of research papers.

Countries climb at different speeds

What do actual income transitions look like?

Below I examine the two legs of the middle-income climb: from lower-middle to upper-middle income (LMIC to UMIC), and from upper-middle to high income (UMIC to HIC). For each leg, I distinguish between economies that have completed the crossing and those still under way. I restrict the sample to economies with at least 10 million inhabitants.1

As a preview, the charts show no common wall at the middle-income level. Countries cross the thresholds at very different speeds, and their paths are shaped by growth, commodity cycles, financial crises, exchange-rate movements, conflict and other country-specific shocks.

From LMIC to UMIC

Let’s start with the completed runs for the first leg.

Azerbaijan completed the run fastest, in just six years, helped by an oil boom. China followed a steep path too, taking 13 years if we start from when it first became an LMIC in 1997.2 Viet Nam, the median performer in this sample, took 16 years. It climbed fastest in its first five years and then eased gradually.

Indonesia needed 29 years and was the slowest of the completed runs in this sample: its climb was interrupted early by the Asian financial crisis before resuming. And its final decade covered just the last tenth of the distance.

Sri Lanka spent about five years close to the line (censored at 100) without being reclassified. It eventually entered the UMIC group in 2025. Ukraine had a path that resembles a sawtooth of war, recovery and renewed shocks.

The ongoing runs tell a complementary story.

Eighteen economies are currently on this leg. Cambodia, Bangladesh and Uzbekistan track close to the median completed run (thin gray line). Egypt and Honduras have been in the bracket for a quarter century, with their progress repeatedly interrupted. In Egypt's case, devaluations erased years of gains measured in Atlas dollars.

Sudan, Nigeria and Zambia have lately moved away from the line. Notice how Senegal and Cameroon are almost flat from the year of entry, remaining far below the threshold.

The slow climbers were slow from the start. Their difficulty looks less like hitting a wall at a particular income level and more like persistently weak growth, compounded by currency and conflict shocks.

From UMIC to HIC

The upper transition is the one most often described as the harder leg.

Romania is the median performer. It completed the UMIC-to-HIC crossing in 16 years, which is the same number of years as the median run on the lower leg. Russia completed the run in just 8 years. Then came Czechia in 12, Poland in 13, and Chile in 19. Argentina took a total of 23 years, crossing after a collapse followed by a long recovery. Venezuela reached the line in 2014 before falling away again.

The upper leg spans a smaller income multiple than the lower leg: the ratio between the HIC and UMIC thresholds is 3.1, compared with 3.9 between the UMIC and LMIC thresholds. It should also be noted that those entering the upper-leg run seem to be entering closer to their target line.3

So if countries complete the two runs in the same number of years, growth must have been faster during the lower-income transition. But this does not point to a middle-income trap. It is consistent with the broader pattern in which growth tends to moderate as income rises, including the regression to the mean documented by Pritchett and Summers (2014).

Among ongoing runs, note the stellar performance by China, which is about to cross the line after 15 years. Kazakhstan did well too and is now at 95 percent. Türkiye has touched the threshold twice and is on the cusp of reclassification.

Malaysia is 33 years in and has grown steadily albeit more slowly over the past decade, reaching about 85 percent. Some countries took even longer: Mexico (35 years), Brazil (36) and South Africa (37). These are among the countries most often cited as evidence of a middle-income trap.

Brazil benefited from buoyant commodity prices during 2011-14 and went in reverse later on when the boom unwound. Mexico seems to have oscillated between 60 and 90 percent of the threshold for three decades. South Africa has moved sideways since 1988.

Jordan and Tunisia have followed relatively flat paths from the time they entered the bracket, well below the HIC line.

These look like stories of persistently slow growth, commodity cycles, crises and policy constraints. The same forces appear below the middle-income thresholds and among slow-growing high-income economies.

The middle of the income ladder has no monopoly on stagnation.

Download the data from GitHub

What the evidence says

The empirical literature has looked for a middle-income trap for more than a decade. The results do not establish a distinctive trap.

The findings are worth reading carefully because some of the papers often cited as evidence for the trap say something narrower.

• Eichengreen, Park & Shin (2011) and (2013) are often cited as evidence for the trap. But their result is about growth slowdowns, not a uniquely middle-income barrier. Slowdowns cluster around US$10-11,000 and US$15-16,000 in 2005 PPP, with substantial dispersion. The authors themselves stress that “there is no iron law of slowdowns.” Multiple slowdowns at different income levels are a poor fit for the idea of a single middle-income wall.

• Felipe, Abdon & Kumar (2012) define being “trapped” using median transition times of 28 years in lower-middle income and 14 years in upper-middle income. They acknowledge the thresholds are arbitrary. Their follow-up paper, “Middle-Income Transitions: Trap or Myth?” (2017), leaves the question open.

• Pritchett & Summers (2014) conclude: “regression to the mean is the empirically most salient feature of economic growth.” They find this pattern to be much more robust than the middle-income trap. In their view, treating growth slowdowns as evidence of a trap risks misreading ordinary growth dynamics as a special middle-income phenomenon.

• Im & Rosenblatt (2015) likewise conclude that “transition matrix analysis provides little support for the idea of a middle-income trap.”

• Bulman, Eden & Nguyen (2016) find “no evidence for (unusual) stagnation at any particular middle income level.” They do find that the determinants of growth differ by income level, meaning strategies need to evolve. But changing growth strategies is not the same as being caught in a middle-income trap.”

• Ye & Robertson (2016) take a different approach, using time-series tests for unit roots and structural breaks. They find only around seven countries meeting the conditions for a genuine trap. If a trap exists, their results suggest it is the exception rather than the defining feature of middle-income development.

• Han & Wei (2017) use transition matrices and find that the data “clearly reject” the idea that middle-income economies have either a high absolute probability of being stuck or a higher relative probability than low- or high-income groups. Their results suggest middle-income countries reach “escape velocity” more often than poorer or richer ones.

• Alonso & Ocampo (2020) assemble the fullest book-length treatment in Trapped in the Middle? (Oxford University Press). The contributors find that few middle-income countries have completed the transit to high income in recent decades, yet the volume traces this to heterogeneous structural and institutional constraints rather than a single barrier at a common income level. The diagnosis points to many country-specific problems.

• Patel, Sandefur & Subramanian (2021) document in the Journal of Development Economics that unconditional divergence, the central fact of growth empirics, has been reversed since the mid-1990s, with poorer countries catching up with richer ones. They call the trap debate "anachronistic" for a simple reason. Middle-income countries have posted higher growth rates than all other groups since the mid-1980s. A group that outgrows everyone else makes for an odd trap.

• Kremer, Willis & You (2022) reach a similar verdict in the NBER Macroeconomics Annual. They find a trend toward unconditional convergence since the mid-1980s, culminating in absolute convergence since 2000, driven partly by convergence toward development-favored policies across countries. Convergence is the opposite of entrapment. Their debate with Acemoglu and Molina concerns the strength of convergence, and neither side defends a middle-income wall.

• Imam & Temple (2024) offer the most sympathetic recent treatment, using Markov chains and mean passage times in an IMF working paper since published in the Scandinavian Journal of Economics (2026). Even they concede there is little evidence that transitions from a middle-income category are uniquely difficult in the income data. Their candidate trap is in the lack of upward mobility in relative TFP, and lies mostly in the future.

Peak Middle Income and beyond

If the trap cannot be found in forty years of data, the natural next question is what happens when we stop looking for it.

Projecting 2050 conservatively

The projections in this section are built on that premise. Each of 197 economies is projected forward using the median of its own annual growth of GNI per capita, in US$, Atlas terms, over the decade to 2025. And the classification thresholds drift upward at 1.244 percent a year, the median pace over the same decade. Full details are provided in an earlier post.4

The choice of median growth over the last decade is conservative for two reasons. First, the median dampens the influence of extremes, such as a devaluation or a one-off commodity spike. The influence of the COVID-19 pandemic is hereby mitigated. Second, and less obviously, 2016-2025 was an unusually weak decade for GNI per capita growth in middle-income countries.

The chart shows how weak. The typical middle-income economy grew 3.6 percent a year over 2016–25, down from 5.9 percent in the exceptional decade of 2006–15 and lower than in every earlier decade in the series. Weighted by population, the drop is steeper still: from 9.3 to 5.0 percent. Only 37 percent of middle-income economies gained ground on the United States over the seed decade, down from 91 percent in the decade before.

So the projection is not an optimistic scenario. It assumes that a disappointing decade repeats itself.

Nor do I build any trap-like slowdown into the projections as economies approach an arbitrary threshold. The evidence reviewed above gives no basis for doing so. Transition-matrix and duration studies found that exit probabilities do not fall simply because a country has spent longer in an income group. Fast growers tend to remain fast and slow growers tend to remain slow, with no distinctive slowdown appearing in the middle.

There are, of course, caveats. This is still a mechanical benchmark, not a fully-fledged forecast built from the ground up based on country detail. It might overestimate or underestimate future growth, and the further out a crossing lies, the larger the margin of error.

But the question that the exercise addresses is actually quite simple: what happens if recent growth patterns persist, including whatever slowdowns are already embedded in them?

The answer is a large movement out of upper-middle income over the coming decades. China crosses the high-income line, in all likelihood, in 2026. But there are many other factors contributing. And there is a twist related to demography I will get back to at the end

Peak Middle Income by population

What does the constant-pace scenario imply for the way the world’s population is distributed across the classification?

Let’s start with the group at the center of the middle-income trap debate because this group has peaked (or is about to).

In headcount terms, the middle-income population is expected to have peaked at 6.02 billion people in 2025. This is technically a nowcast since China is projected to transition to HIC some time in 2026. China’s exit takes 1.4 billion people out of the group in one step, causing a dent that will not be recovered over the horizon to 2050. By then, the middle-income population is expected to settle at 5.40 billion.

The turning point is even clearer in population shares. Middle-income countries accounted for 75 percent of the world’s population in 2016. Today the share is 73 percent. By 2050, this is expected to fall to 56 percent.

But the middle-income story makes little sense in isolation. The rise of the middle is largely the mirror image of the decline of the bottom.

The low-income population fell from 2.82 billion in 1987 to 0.77 billion in 2025 as India, and before it China, moved upward through the classification. The high-income share of world population stayed remarkably stable for four decades, at around 16-17 percent, before China’s reclassification produces a one-off jump to roughly 37 percent. Afterward, the share settles into a new pattern.

Peak Middle Income by country count

Now switch from people to economies. How many economies occupy the middle of the classification?

By this measure, Peak Middle Income is long past.

The number of middle-income economies peaked at 110 in 1992. The spike partly reflected the Soviet, Yugoslav and Czechoslovak successor states, which entered the classification largely in the middle-income brackets.

There were 106 middle-income economies in 2025. From here, the middle is projected to empty out: 78 economies are projected to remain middle income in 2050, equivalent to 36 percent of all classified economies. At its peak, middle-income economies accounted for 54 percent of the total.

Where do the departing economies go?

They generally move upward. The high-income roster has expanded almost continuously since 1987, from 41 economies to 87 today. The projection takes the number to 124 by 2050, when 57 percent of all classified economies would be high income.

The classification therefore inverts at the country level too. In 1987, the modal classified economy was middle income and nearly one-third were low income. By 2050, the modal economy is projected to be high income, while the number of low-income economies falls from 25 to 16.

Who fills the buckets

There is a puzzle hiding in the previous two sections. If dozens of economies are joining the high-income group, why does its share of world population remain broadly stable after 2026?

The answer lies in how the buckets fill and empty.

Each income group changes size through two channels: population change among existing members, and reclassification as whole countries move between groups.

Between 2000 and 2025, India and 39 others carried 2.17 billion people out of low income into the middle. Between 2025 and 2050, China and 36 others carry 2.25 billion out of the middle into high income.

The hatched bands calculate organic population growth among economies being reclassified. They show the total effect of population growth before and after the reclassification event.

The result is that the middle-income group that remains keeps growing from within (+0.98 billion among the 69 stayers). The high-income group, however, shrinks from within once China joins: its new membership loses 0.13 billion people after reclassification.

The decomposition sharpens the argument about Peak Middle Income.

Of the 6.02 billion people in middle income today, 42 percent arrived by upward reclassification over the past quarter century. By 2050 the composition flips. Some 70 percent of its population was already there in 2025 and only 9 percent arrives from below, which reflects the fact that the low-income feeder has largely emptied.

High income sees the opposite pattern, where 63 percent of its 2050 population arrives by reclassification, and its own demographic contribution turns negative (−3 percent).

In other words, the middle increasingly becomes a club of incumbents, and the top grows through admission.

As the top bucket keeps on growing, one might ask whether the classification remains fit for purpose if its largest bucket has become the top one?

Don’t be a trappist

The word Trappist most commonly refers to a strict Roman Catholic religious order of monks and nuns, the specific style of excellent and rather strong beer brewed by them, or TRAPPIST-1, the ultra-cool dwarf star system famous for its seven Earth-sized planets.

But there is a fourth kind of Trappist: the development practitioner who practices what I call development simplism, the habit of compressing a complicated development problem into a single fatalistic label.

The previous sections have shown three things. First, the name is misleading. The “trap” is not a trap, and the problem is not specific to middle-income countries. Second, the empirical literature does not establish a middle-income trap. Third, even a deliberately conservative projection points to a world moving decisively beyond Peak Middle Income.

But there are further reasons to retire the concept.

• It breeds fatalism. “Trap” implies inevitability. That demoralizes reformers and hands underperformance an alibi, when the political economy of growth points to domestic choices, coalitions and institutions. What countries need is agency, not destiny.

• It gives arbitrary thresholds too much weight. The trap discourse hinges on the crossing of the high-income line, which has questionable origins (see my previous post) and has since its introduction in 1987 only been adjusted for inflation. The line also has consequences beyond semantics. Donors, the Global Fund and trade-preference schemes such as the US GSP tie eligibility (wholly or partly) to the income category. Cross a line, lose a lifeline!

• It risks becoming self-fulfilling. If investors, rating agencies or policymakers act on the belief a country is in a trap, that belief itself may be sufficient to dampen investment and reform momentum, making a growth stagnation all the more likely.

What to do about it

Drop the fatalism.

What the trap language describes is a policy challenge: sustaining growth as its drivers change. Every country faces this challenge, including rich ones. Middle-income countries have climbed the income ladder at different speeds for reasons that are overwhelmingly about domestic institutions, political coalitions, policy choices and shocks. Some have moved quickly. Some slowly. Some have gone backwards and recovered. There is no single trajectory.

Extend the conversation upward.

The challenge of sustaining and accelerating growth does not end at the high-income threshold. The sky above the line is open, and the distance between the bottom HIC and its richest member today is the widest stretch of the entire income classification.

Look at the two scales.

On the linear scale, LICs, LMICs and UMICs occupy a thin sliver at the left, whereas the HIC band stretches to $140,000, where Bermuda is. On the log scale, where equal widths mean equal ratios, the HIC band is still the widest of the four.

The richest HIC is 10 times above the high-income threshold, which is nearly as large as the factor of 12 that spans the entire middle-income range from the LMIC entry line to the HIC line.

In other words, the high-income line is not a finish line. That was also the argument of the previous post “All Countries Are Developing Countries”.

In sum, retire the trap. Drop the fatalism. Look up. And don’t be a Trappist!

What comes next

Next week: development simplism.

Development professionals have a habit of turning complex challenges into neat frameworks. Simplification is useful. But simplism begins when the framework starts distorting the reality it was meant to explain.

In next week’s post, I will apply this idea to several popular development frameworks built around the World Bank’s income classification, and argue that some have moved from useful simplification to outright simplism, with very real consequences for how we think about development.

Stay tuned for next week’s post!

The Moving Escalator is a series on four decades of movement through the World Bank’s country income classification, where the world is heading by 2050, and whether the classification remains fit for purpose. This is Post 2.

Every July, the World Bank sorts the world into four income groups: low, lower-middle, upper-middle, or high. The groups are set by dollar thresholds and this year’s line for high income is $14,375 in GNI per capita.

Notice what the classification does not contain. There is no group called “developed” or “developing”. The classification simply ranks countries into four income buckets.

Yet much of the public conversation still reduces this four-part classification into a crude binary. The top group is the “developed world” and everyone else is the “developing world”. All too often, high income is treated as synonymous with developed, with the other three groups collectively labeled developing.

This post reviews a decade’s news reporting from twelve major English language outlets in Hong Kong SAR (China), India, Japan, Malaysia, Nigeria, Qatar, Russia, United Kingdom and United States. It asks: have we moved on to a new vocabulary?

The answer is: we haven’t. And that matters because the old vocabulary carries a claim that the data cannot support: some countries have arrived.

My argument is the opposite. All countries are developing countries. All are chasing a moving frontier. No one has arrived. Development never graduates.

The world in four buckets

Before examining how we talk about the classification, let us see what the classification actually says.

The chart below shows how the world is currently sorted into the four groups per the FY27 classification, based on 2025 data. Each bubble represents an economy.1 Income per person is on the vertical axis, color shows the income group, and bubble size represents population. The left panel uses dollars; the right panel shows them in logarithms.

Three observations:

First, nothing here is binary. The world is spread out across the four categories. There is no split between those who are developed and those who are not. Instead, we see four groups. And, shown in a previous post, there is and has been significant movement across the classification. For example, the 2026 data will likely place China above the high-income threshold.

Second, consider the range of the categories. The lower three categories occupy a thin sliver at the bottom. The contrast with the high-income group is especially visible on the linear scale. Unlike the other three groups, the high-income category has no upper bound, although I have censored the chart at $90,000 for visualization purposes.2 If high income truly meant “developed”, such enormous variation within the category would be hard to explain.

Third, using logarithms stretches the lower end of the distribution, and that makes the differences among poorer economies easier to see. Equal vertical distances between any two pairs of countries represent equal income ratios. But even in ratio terms, the high-income band remains the widest of the four. As a result, it takes more growth to travel across the top band than across any other.

Where the line comes from

The high-income threshold goes back to a decision made nearly forty years ago. The 1989 staff report that launched the modern classification proposed $6,000 in 1987 prices as the benchmark separating middle-income from high-income economies. The level was chosen to fix anomalies in how the Bank then listed “industrial’ economies. The benchmark was designed largely to reproduce an existing club of industrial economies rather than emerge from any theory of development.3 Every threshold since has been that number adjusted for inflation.

Interestingly, the same report informed Executive Directors that “developing economies” could remain a convenient shorthand for low- and middle-income countries. It also added a caveat: membership in the group did not mean a country was actually developing. And exclusion did not mean a country had reached some preferred or final stage of development. Exactly.

In 2016, the World Bank dropped the developed versus developing distinction from its flagship data portal, the World Development Indicatos. The UN followed in December 2021, removing the “developed regions” and “developing regions” groupings from its M49 statistical standard, while acknowledging there was no agreed definition of what “developed” meant in the first place.

While pockets of the old vocabulary survive, the institutional thinking has clearly evolved and moved away from the old distinction.4

Our words haven’t changed

I pulled ten years of story-level data from the Media Cloud news archive, covering twelve major outlets and over twelve million stories across nine countries, and counted how often they use three phrases: “developing country,” “developed country,” and “high-income country” (as well as their plural versions).

As the chart below shows, across every single outlet in the sample, “developing country” dominates. “Developed country” comes second everywhere, and “high-income country,” the term most development institutions now prefer, third and barely mentioned.

Usage of the three terms was broadly stable until 2020, when all three surged during the pandemic before declining again. The surge is easy to understand. COVID-19 brought concerns about vaccine access, debt distress and recovery finance, and this pushed the rich-versus-poor framing onto every front page.

One might hope the subsequent decline reflects the possibility that the World Bank’s 2016 decision is now finally paying off, but the ratios between the terms have barely moved. A more plausible explanation is that development itself has become less central in news coverage as geopolitics and national interests have crowded out other matters. In any case, the old terms continue to dominate the newer ones.

One result surprises. Relative to “high-income country,’ the term “developed country’ is far more prevalent in non-Western outlets. One explanation may be that “high-income” is simply a piece of technical statistical vocabulary that has diffused more prominently through Western policy circles and the outlets that cover them. Another is aspiration: in much of the world, “developed” is still the destination written into national visions, from China's mid-century modernization goal to India's Viksit Bharat 2047. A vision of becoming "developed" is undoubtedly more politically compelling than becoming "high income."

Of course, I should also note that this just covers a sample of major outfits and it focuses within them on those in English - that will likely affect the results

Open the data on GitHub

More than semantics

While our thinking has evolved, our words, it seems, have not. That matters for two reasons that point in opposite directions across the income line.

Nobody has arrived

The issue here is not so much that “developing countries” may be more developed than “developed countries” and therefore we should not label them as such. They often do, especially when what it means to be developed is reduced to a measure as narrow and problematic as GNI per capita in current USD. After all, development is far more than just average per capita income and a more multidimensional lens would show many examples of countries below the threshold doing better on non-monetary aspects of development (health, inclusion, sustainability, …) than those further up.

The deeper problem is that “developed” implies “arrival” and the reality is that no country or economy has arrived.

Just look up from the high-income threshold. If your goal is GNI per capita, then there is a long way up. Marginal welfare gains from additional income decline, but they do not disappear. It would be difficult to argue that the welfare gains would be flat across the range shown in the first chart of this post.

And even if countries “arrive” in the high-income bucket, the crossing can be undone: 25 out of the 93 economies that have reached high income since the series began in 1987 have subsequently fallen out of it at least once.

More fundamentally, every country is chasing a moving frontier. Every society is still failing its people in their own ways whether through poverty and disease, or loneliness, burnout, and inequality. And if poverty is measured not only against today’s standards but against the progress we know is possible tomorrow, then no country is rich.

Development has no finish line, which means all countries are developing countries. Including the richest. The frontier keeps on moving under their feet. That is also the idea behind the name of this newsletter.

The label stigmatizes, in both directions

Hans Rosling made the point better than anyone. In the 1960s, sorting the world into two clusters may have been defensible: one group of countries was rich, educated, and demographically stable with long life expectancies, and the other was poor, with short lives and large families, and there was little in between. That world no longer exists, because the middle buckets have started to fill in. The Bank’s own four groups were therefore a promising upgrade, Rosling argued.

But the perception that the world could be divided into “developed” and “developing” continued to persist, as the media analysis also shows. And that does damage. It compresses very different development contexts into one big bucket. It invites a single mental image for most of humanity. It prices risk before examining reality.

Nor does the leading replacement “Global South” solve the problem.5 It basically replaces an economic label with a geographical one that is neither geographically accurate nor analytically useful. Like “developing world” it compresses immense diversity into a single category.

But the label also matters above the line. “Developed” flatters. It tells the richest societies the work is done, at the very moment their frontiers, demographic, technological, ecological, are moving fastest. Complacency is a development trap too.

What to do about it

A few practical suggestions:

• If income is meant, say “high-income” and “lower-income.” Even better use the full vocabulary of the income classification. The terms are accurate, neutral and already official. The term “developing” could be used for what it actually describes, which is every country on the escalator.

• Newsrooms retired plenty of loaded vocabulary by writing the change into their stylebooks. More advocacy to help retire the old vocabulary would be useful.

• Consider subgroups for the high-income ladder bucket. Part of why “developed” survives is that the classification itself implies a finish line: one unbounded final band. Adding bands above the current threshold would visualize the remaining aspirations better.

What comes next

Next week’s post asks whether the famous “middle-income trap” exists at all. The concept has shaped decades of policy advice. Does the evidence support it?

Stay tuned!

The Moving Escalator is a series about four decades of movement through the World Bank’s country income classification, where the world is heading by 2050, and whether the classification itself remains fit for purpose. This is Post 1.

If you switch on the news and see nothing but crises, zoom out and take a longer-term view.

One way to do so is to look through the lens of the World Bank’s country income classification. Prompted by its annual update in July, I took a fresh look at how countries have moved across its four income groups — low, lower-middle, upper-middle, and high income — and projected what the world of 2050 might look like through this lens.

The classification is based on per capita Gross National Income. That makes it a narrow lens on development, since development is about much more than income, let alone average income. Yet it remains one of the most influential yardsticks in international development and a useful starting point for understanding long-term change.

The three charts below trace the movement of countries through the classification from 1990 to 2050. The projections extrapolate each country’s median growth over the past decade. I explain the method in more detail at the end.

Three takeaways

The 70% inversion

The first chart shows how the global population is distributed across country income groups: what share of humanity lives in each of the four groups, and how that distribution shifts over six decades. Note that the labeled bands name the largest country in each flow, and each carries a group of others.1

The most striking result is the inversion of the global distribution of people across country income groups. In 1990, the world was heavily concentrated in the poorer half of the classification. Most people lived in countries classified as low income (red) or lower-middle income (orange). Together, these two groups accounted for 71% of humanity.

By 2050, the projections suggest that 71% of the global population will live in the richer half, in countries classified as upper-middle income (green) or high income (blue). The distribution will have completely inverted.2

That these figures are almost identical is a coincidence (the difference emerges only after the third decimal). The inversion however is no coincidence. The country income group distribution is on track to flip upside down. This is one of the most remarkable development stories of our time.

The scale of transformation

The second chart tells the same story in absolute numbers, tracing the number of people, in billions, living in each country income group between 1990 and 2050. This perspective reveals several additional patterns.

The first is the significance of population change. The world’s population is expected to almost double: from 5.3 billion in 1990 to 9.6 billion in 2050. The classification captures that growth well because it covers over 99% of humanity. And the total height of the bars traces the global increase almost one-for-one.

The second is that the climb to higher income happens despite where population growth is concentrated. Population has grown fastest in the poorest countries, where fertility has stayed relatively high while life expectancy has continued to rise. Despite this, the world has still climbed the moving escalator faster than the thresholds themselves have risen.

And this is the central point of the post: a very large absolute movement of people into richer-country categories.

China and India on the moving escalator

The projections show what a remarkable success story China has been through the lens of the classification. China rode the express escalator. It was still low income in the late 1990s, became lower-middle income in 1999, and reached upper-middle income in 2010. Based on current data, China is on track to cross the high-income threshold in 2026, with the World Bank expected to announce its reclassification in July 2027. The move from lower-middle to upper-middle income took only eleven years, while the transition from upper-middle to high income took sixteen.3

India has climbed more slowly. It entered the lower-middle-income group in 2007 and is projected to reach upper-middle income in 2036 under the business-as-usual scenario (discussed further below). That means India is likely to take 29 years to cover the same stretch that China completed in 11 years. With faster reforms, a more favorable external environment, and a measure of good fortune, that transition could, of course, arrive sooner, even though the opposite could also transpire.

Because China and India together account for over one-third of humanity, their movement through the classification has an outsized effect on the global distribution across income groups. This is clearly visible in the charts.

But the most consequential shift still lies ahead: India’s move into the upper-middle income. By then, its population will be at about 1.6 billion people. That single transition will lift the upper-middle-income group to 3.4 billion people by 2040, and it peaks near 3.5 billion in the mid-2040s. This makes it the largest any income group has ever been. By 2050, the high-income group will however overtake, reaching 3.6 billion.

Technical notes

The starting point

I consider 224 economies listed in the World Bank’s historical dataset that are classified in at least one year during the period 1987-2025. Six left the classification before 2025 so cannot be projected (e.g., USSR, Netherlands Antilles, and Serbia and Montenegro). So the universe consists of 218 economies.

The starting point is each economy’s 2025 GNI per capita level as reported in the World Development Indicators. This is used exactly as published. A country’s currently published GNI per capita can sit on the other side of the line reflected in the classification. That is because the Bank updates its classification in July of the next year and revises the previous year then. I use the reported figures as published, which leaves the discrepancy visible.

Threshold drift

Since GNI per capita is expressed in nominal terms, inflation is corrected for by allowing the thresholds to drift. The good thing is that the thresholds move in sync. Since 1990, the lower-middle-income threshold has been consistently about 4 times the low-income one and the high-income threshold has been 3.1 times the upper-middle income one.

I impose a common drift rate of 1.244% a year for all three thresholds. This rate is based on the median annual change in the published thresholds themselves over the decade to 2025. The Bank indexes all three to the SDR deflator, which is compiled from inflation measures of economies represented in the IMF's Special Drawing Rights: currently China, Japan, the UK, the US, and the Euro Area. I did a robustness check on the choice of the 10-year window, but altering the window between 10, 15, 20 and 25 years doesn’t move the drift rate outside the 1.16% -1.25% range, so 1.2% seems a good assumption.4

GNI per capita projection rates

I have taken the approach of not allowing for any downgrades in the income classification during the projection horizon. One could argue that this unreasonable. Conflict, for example, is the most likely factor driving a sustained long-term decline. But given the 2050 horizon, I am assuming that such cases will be resolved and hopefully they will. To accomplish this, I impose a lower bound of 1.2% to growth rates. Since this is also the rate at which the thresholds increase, no economy is projected to fall out of its income group. This assumption matters considerably as it affects countries that represent 14.4% of the global population.

In determining country-level projection rates, I apply a degree of smoothing at three different levels. First, the use of a median over the past growth rates of the last decade filters out unusually strong and weak years. Second, the projected growth rates are based on quantities already smoothed by the Atlas method (the exchange rate with the US$ is averaged over three years and adjusted for differences in inflation between the country and major economies). So the projections embed that smoothness into the projected rate. Third, I bound the projections from above at the 90th percentile of median 10-year growth observed across each income group: 5.6% for low income, 7.5% for lower-middle, 9.1% for upper-middle and 7.2% for high income. This is to rule out any unreasonable growth paths relative to the historical experience over the last 10 years. This assumption affects countries that represent 7.3% of the global population.

There are 21 economies (representing 1.8% of the global population) that suffer a data problem in that fewer than 8 of the 10 annual observations needed to establish the median GNI per capita growth rate over the last decade are available. These economies remain in the sample but they are frozen at their 2025 classification. Six among them are not high income: Cuba, Eritrea, Democratic People’s Republic of Korea, South Sudan, Syria and Yemen.

All in all, about three-quarters of humanity is projected on its own observed growth rate. The remaining quarter splits into 21.7% whose rate is set by a bound and 1.8% whose class is frozen outright.

Interpreting the projections

The projections should be interpreted as a simple business-as-usual scenario that extends recent experience into the future. Each economy’s GNI per capita is assumed to grow at its median annual rate over the past decade. The objective is not to forecast individual countries with precision, but to construct a simple, transparent baseline grounded in recent history. Although the past decade includes the COVID-19 pandemic, using the median largely filters out the influence of that extraordinary shock.

The scenario does not describe what is desirable, achievable, or even most likely to happen. It simply projects current trends forward under broadly unchanged policies and an external environment that stays roughly similar (or as, one might argue, similarly rough). With stronger reforms, many economies could outperform these projections. Without them, outcomes could be weaker. External developments (such as technological breakthroughs, shifts in globalization, climate shocks or another pandemic) could, of course, produce surprises in either direction.

Even with these caveats, the broad picture emerging from the scenario appears relatively robust for two reasons. First, predicting movements between income groups over a decade is easier than predicting any country's GNI per capita in a given year. Whether a country crosses a threshold early or late within the 2040s changes little to the overall picture in 2050. Second, the projections aggregate outcomes across nearly 200 economies, so individual forecasting errors tend to offset one another to some degree.

A comment on entry and exit

While I assume no such changes over the projection horizon, economies have historically entered and left the classification from time to time. This typically results from geopolitical change (most often), expansion of the Bank’s coverage (e.g., when small states like Nauru were added), or a lapse in the data needed to classify an economy in a particular year (such as Venezuela from 2020 to 2024).

As a result, the flows between columns do not always connect. Each column still sums to 100% of the classified population, but a band can terminate without a successor or begin without a predecessor. Countries that disappear simply drop out of one column, while newly created ones enter the next without a connecting band.

For example, the USSR, Yugoslavia, and Czechoslovakia were all classified as upper-middle income in 1990, with about 330 million people between them. They left the classification upon dissolution, and their successor states re-entered mostly a rung or two below: of the 22 successor economies, 13 came back as lower-middle income and 6 as low income by 1995, with only Slovenia, Croatia and Czechia re-entering as upper-middle income. The upper-middle-income band was not fully replenished until China arrived in 2010.

Open the data on GitHub

Massive progress but narrow perspective

While I am reasonably confident in the projections, the country income classification itself remains a narrow way of viewing development.

Because it relies solely on average per capita GNI, the classification is distribution-blind. A country crosses a threshold when its average crosses it, which tells us nothing about who inside the country has benefited.

The classification is also income-centric. Development is far more holistic, of course, encompassing health, education, opportunity, rights, and agency alongside income. Many of these dimensions correlate with income, but the relationship is far from perfect.

Even so, the results remain striking. A world in which 71% of humanity lives in upper-middle and high-income economies is a world with greater fiscal capacity, deeper markets, and more resources for health and education than the world of 1990.

The lens may be narrow, but through it we can still see one of the largest improvements in material living standards in human history. And that is a positive story worth remembering next time we switch on the news.

What comes next

This was Post 1. Beneath the global picture lies a much richer story.

In next week’s post, I will argue that all countries are developing countries. We should move on from the artificial distinction between “developed” and “developing.” The World Bank did so in 2016 but many major news outlets around the world have yet to do so.

Stay tuned!

These lines organize how we think. They tell us who is ahead, who is behind, what counts as progress, and what constitutes arrival.

Here is the thing about these lines: they move.

The high-income threshold of 1990 is in a different place today. The technologies that defined the frontier a generation ago are now mere table stakes. The demographic profile that once powered East Asia’s economic miracle is inverting into its greatest test.

Even the questions move. “How do countries grow?” has given way to fundamentally harder ones: How do countries grow when the ladder others climbed is being pulled up, when populations age before they prosper, when the technological frontier races ahead faster than institutions can absorb it?

This newsletter takes its name from that double movement. Frontiers move on their own, reshaped by demography, technology, and geopolitics, among many other relevant trends. And frontiers can be moved, by countries that see clearly, bet wisely, and govern well.

Moving Frontiers is thus about both: how the frontiers of development are shifting beneath us, and how we can shift them ourselves.

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Reframing development

Underneath Moving Frontiers lies the idea that development needs to be reframed. The reason is that the world has delivered some of the most remarkable gains in history, yet aspirations remain unmet, human insecurity is rising, and the development landscape ahead of us looks far more turbulent than at any point in recent memory.

Accelerating progress under these conditions demands a willingness to see development, imagine it, and shape it differently.

Seeing development differently

The long view reveals extraordinary progress: over two centuries, every region has raised incomes, health, and education. But the journey remains deeply unfinished — ninety percent of humanity lives in regions below forty percent of frontier income, and not a single SDG is on track for 2030.

And the road ahead looks harder, not easier, as job insecurity hits record highs and clusters of risk converge across existential threats, fresh headwinds to growth and job creation, and growing governance risks.

Seeing development clearly means holding all three truths together: genuine progress, a large unfinished agenda, and mounting turbulence.

Imagining development differently

Too much of the development discourse collapses this turbulence into a narrative of polycrisis.

Crisis language narrows our vision; opportunity thinking keeps it open.

Aging is not merely a drag on growth but also a massive opportunity to live longer lives with vitality, purpose and connection — and to develop new engines of growth in health and care. Technology, after centuries of failed doom predictions, is delivering significant welfare surpluses beyond monetary output metrics, without necessarily costing jobs. And globalization is not retreating but slowing — disglobalization, not deglobalization — with the absolute scale of opportunity undiminished and, indeed, still expanding.

Imagining development differently means reading disruption as raw material for renewal.

Shaping development differently

Seeing and imagining are the easy parts; the harder question is what the development models of the future must contain.

I believe these are the following three things:

• Put people first: human development concepts are well developed but poorly mainstreamed, and a systemic reset must place people at the heart of strategy.

• Pursue smarter growth: the call for growth should be louder, not quieter — but it must be the right kind, not jobless, ruthless, voiceless, rootless, or futureless.

• And make change happen: the binding constraint is rarely a shortage of ideas but the politics of reform and the art of delivery. Yet both are all too often treated as afterthoughts.

Shaping development differently means people first, smarter growth and an unrelenting focus on effective leadership and governance, so change actually happens.

Combining different lenses

The title of this newsletter reflects a personal journey across institutional frontiers. I have spent my career inside global development institutions, moving from the International Monetary Fund to the World Bank to the United Nations Development Programme.

Each has its own way of seeing:

The Fund taught me to think in terms of stability: the macro-financial plumbing that must hold before anything else can be built. Hard-won gains can unravel when the foundations crack. The first discipline of development is keeping things from breaking.

The Bank taught me to think in terms of transformation: the long structural climb from farm to factory to frontier, and the evidence base that tells us which interventions actually work. As country economist for China, Brazil, and Malaysia, and later leading Global Modeling & Analytics in the research department, I saw development as a measurable, comparable, worldwide project, with all the immense power and all the distinct blind spots that measurement brings.

UNDP has taught me to think in terms of capability and possibility: development as the expansion of what human beings can be and do, pursued in real time across 34 countries in Asia and the Pacific, where I currently serve as Chief Economist. From this vantage point, the abstractions of thresholds and trajectories resolve into something concrete: governments making strategic choices under uncertainty, and the quality of governance deciding whether good analysis ever becomes good outcomes.

Stability, transformation, capability. Each lens is incomplete on its own. Held together, they change what you see.

This newsletter is where I hold these three perspectives together, or at least will try to do so.

What is coming?

The opening series on the “Moving Escalator” will ask how we measure frontiers. For many decades now, the World Bank’s country income classification has served as development’s de facto scoreboard, sorting every country into low, lower-middle, upper-middle, and high income. I will trace how the world has actually moved through that lens: who climbed, who stalled, and where the hard passages lie. Then I will turn the question around and ask whether the lens itself still serves us, and what a better one would look like.

Next comes a series on China. Whatever one’s priors, China’s development is the most consequential economic transformation in recorded history, and I will argue that we systematically look at it through the wrong frames. The series will ask how we should look at China, and what China’s experience, its successes and its unresolved tensions alike, carries as lessons for the rest of world.

After China, India: the other continental-scale development experiment, running on a different operating system, whose next two decades will do much to define what the moving frontier means.

And threaded throughout, I will examine several mega-trends: demographic change, shifts in globalization, and technological change. The temptation with each is to catalogue risks. I want to look more deeply at opportunity, more holistically at what these forces mean for countries pursuing a frontier that refuses to stand still, and above all connect the dots between the trends as they interact in very interesting, and potentially rather challenging, ways.

An invitation

Expect an essay every week or two, anchored in data and charts, written for anyone who thinks seriously about development: policymakers, practitioners, researchers, students, and the professionally curious.

One of my goals will be to pose questions that unsettle the status quo. The comfortable boxes of development thinking, the income categories, the standard sequences, the tired dichotomies of state versus market and growth versus equity, have all outlived much of their usefulness. So I will try to step outside these and cast fresh perspectives on old and new questions alike.

Hope you will enjoy the materials!

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