- Convenors:
-
Florian Schaefer
(King's College London)
Nahee Kang (King’s College London)
Send message to Convenors
- Format:
- Paper panel
- Stream:
- Shifting geopolitics and development futures
Short Abstract
Great-power rivalry is reshaping development via geoeconomic power projection. This panel looks at how and with what consequences middle-income countries are adjusting development strategies in response.
Description
Growing great-power rivalry raises urgent questions about how geopolitics affects development strategies and trajectories. Geopolitical fragmentation has increased the use of geoeconomic instruments such as trade barriers, sanctions, export controls, ‘friendshoring’, and the ‘de-risking’ of transnational supply chains more broadly, while international trade and production networks are subject to rising uncertainty and instability. For middle income countries, a long-standing concern has been the possibility of getting ‘stuck’ in a middle income trap (Kang & Paus, 2020; Raj-Reichert, 2020), necessitating a broad set of strategic industrial policies to offset or overcome such slowdowns (Behuria & Sumner, 2025). These concerns are heightened as powerful states employ economic statecraft and increasingly naked power in pursuit of geostrategic advantage (Moisio & Paasi, 2013; Sparke, 2018).
A rich and growing literature has emerged to analyse how transnational value chains and production networks are shifting and changing under these renewed geopolitical pressures (e.g. Gong et al., 2022; Hess & Horner, 2024; Pavlínek, 2024; Yeung, 2024), but only few studies have explored these issues with the specific challenges of middle income economies in mind (e.g. Bril-Mascarenhas et al., 2025). With great powers competing to control the key technologies shaping this more geostrategic process of globalisation (Schindler & Rolf, 2025; Selwyn et al., 2025), we invite submissions that ask how, to what extent, and with what consequences middle income countries are adjusting their national development strategies and industrial policies, and, crucially, how this affects what we know about middle income growth slowdowns.
Accepted papers
Paper short abstract
Western sanctions on Russia sharply reshaped Armenia’s trade. Using customs and employer–employee data, I document large shifts along the intensive and extensive margins and estimate the causal effects of sanctions-driven trade reorientation on firm performance.
Paper long abstract
This paper examines how sanctions on a major trading partner impact the firms and trade of a neutral economy, using the case of Armenia and the Western sanctions on Russia as an example. I first develop a theoretical framework in the spirit of Ahn, JaeBin, Amit K. Khandelwal, and Shang-Jin Wei (2011 Journal of International Economics) model that features both direct and indirect trading firms and benefits/costs associated with sanctions. Using matched customs and employer–employee data covering 2018–2023, I document a sharp increase in Armenia’s intermediary role, with exports to Russia rising markedly, especially along pre-existing firm–product–partner relationships. Trade in sanctioned goods was disproportionately rerouted through Armenian firms, with higher values and unit values concentrated among incumbents. At the firm level, exporters and dual traders expanded turnover, while importers and intermediaries captured mark-ups rather than expanding production. At the employee level, wages in trading firms rose, but employment creation was limited, suggesting that gains accrued mainly to existing workers rather than through broad-based labor market expansion. In addition to the empirical findings, the paper presents a description of Armenia’s newly accessible administrative datasets as a valuable resource for future economic research.
Paper short abstract
The paper analyzes how great power rivalry reshapes post socialist middle income economies. Through a QCA of the Visegrád Four and five Central Asian states, it shows how institutional integration and external alignment shape divergent paths amid EU friendshoring and multi vector alignment.
Paper long abstract
Great power rivalry is reconfiguring the development of post socialist countries through intensified geoeconomic power projection, compelling middle-income economies to recalibrate their development strategies. This paper explores how the European Union’s Green Deal, the U.S. Inflation Reduction and CHIPS Acts, China’s Belt and Road Initiative, and Russia’s Eurasian Economic Union reshape the industrial upgrading trajectories of those countries. Using Qualitative Comparative Analysis (QCA), we compare Central Europe’s Visegrád Four and Central Asia’s five states (n=9) to identify how different combinations of institutional integration and external alignment produce divergent adaptation paths amid geopolitical fragmentation.
Findings indicate that EU integration has embedded the V4 within transnational production networks via subsidies, regulatory harmonization, and investment incentives. Yet such friendshoring and de-risking practices have reinforced dependent upgrading, constraining domestic innovation and deepening the reliance on foreign capital and technology. In contrast, Central Asian states’ long standing multi vector diplomacy—once an effective balancing strategy—has become a high-risk alignment under sanctions, infrastructure competition, and rival geoeconomic instruments. The overlap of major power initiatives generates institutional friction, fragmented governance, and renewed middle income trap pressures.
The study argues that when post-socialist middle-income countries remain unable to act as institutional architects capable of redesigning the rules of industrial transformation under great-power rivalry, they face structural limits to growth and constrained trajectories of industrial upgrading.
Paper short abstract
The scholarship on middle-income trap is stuck. At the heart of the problem is the "East Asian exceptionalism": i.e., East Asians developed under a particular set of geopolitical conditions, and that they cannot be found elsewhere. I ask if these conditions were as exceptional as is often claimed.
Paper long abstract
In development studies, there is the long-standing critique of the growth paradigm that emerges from the modernisation theory, derived through the study of Western European Miracle with its institutions modelled as best institutions. Development scholars draw on the world systems and dependency theory point to the perennial structural constraints that make “catch-up” growth near impossible. Here, East Asian Miracle is deemed with ambivalence due to “East Asian exceptionalism”: i.e., that the East Asian Tigers developed their institutions under a particular set of geopolitical conditions, and that they cannot be found elsewhere. The premise of the paper is that this ambivalence is what is holding the middle-income trap scholarship back, and in order to suggest viable pathways to high-income transition, I compare two economic miracles: the Western and East Asian Miracles. Deploying sequential comparative historical analysis, I show that both miracles experience three sets of revolutions – i.e., military revolution, bourgeois revolution and disciplinary revolution – but that these revolutions take different forms and functions to reflect varying time and space considerations. The implications of my findings are that rather than viewing East Asia as an exception, it should be used as a rare case of success, and that the focus of middle-income trap research needs to be on teasing out the forms and functions of the three revolutions in ways that enable useful middle-range insights for other regions.
Paper short abstract
This paper examines how Indian automakers and policymakers navigate the software-defined vehicle transition amid geopolitical competition over platform ecosystems. It investigates firm strategies, technology partnerships, and industrial policy under conditions of technological uncertainty.
Paper long abstract
How do developing country firms balance technological catch-up imperatives with national sovereignty goals during technological revolutions? This paper examines India's electric vehicle sector amid intensifying geopolitical competition over automotive digitalisation. Platform ecosystems controlled by US and Chinese firms—operating systems, AI compute, autonomous driving stacks—are reshaping competitive dynamics in ways that complicate traditional models of industrial development. India possesses renowned IT capabilities and established automotive manufacturing, yet struggles to develop indigenous EV competitiveness without extensive foreign partnerships. This puzzle illuminates how the technopolitics of software-defined vehicles create novel constraints for late industrialisers.
Drawing on fieldwork in India's automotive sector, I examine how automakers and policymakers navigate these pressures. Interviews with automotive executives, technology managers, and policy officials are triangulated with firm annual reports and policy documents. The empirical focus spans 2019–2025, when Production Linked Incentive schemes and data governance policies set aggressive indigenisation targets while firms like Tata Motors and Mahindra simultaneously expanded collaborations with global software platform providers.
I investigate how Indian firms respond in practice: their business strategies for the software-defined vehicle transition, their approach to technology partnerships, and their investments in indigenous capabilities versus integration with foreign ecosystems. I also analyse how policymakers design industrial policy instruments under uncertainty about which capabilities matter and which dependencies are acceptable.
The paper contributes to debates on industrial upgrading and the viability of catch-up strategies under platform capitalism. It examines whether industrial policy tools designed for previous technological eras remain effective in the 21st century’s developmental landscape.