This book has addressed the institutional and political bases of two key growth transitions: structural change – the move from an economy based on a small number of traditional sectors to a more diversified structure of multiple, nontraditional activities; and upgrading – the efficient production of higher value added goods based on local inputs. The first transition is difficult: the identification of and mobilization of resources for risky new activities pose significant coordination and information challenges. My principal focus, however, has been on the even more challenging obstacles of upgrading: Why have some countries that succeeded in diversifying their economies had a much more difficult time at upgrading?

Although this set of questions has received little attention from scholars and policy makers, it lies at the heart of differences between the East Asian NICs and the “little tigers” of Southeast Asia. I have addressed these questions through comparative analyses of one “little tiger” – Thailand – a country that has transitioned from low-income to middle-income status within just a few decades and has continued to grow on the basis of impressive diversification. Yet Thailand faces “a real challenge of sustaining its growth and transitioning into a higher income country …” With more intense global competition, Thailand needs to improve its productivity and competitiveness “if it … (is) … to avoid being stuck in a middle-income trap in which many Latin America (sic) countries have been in for several decades.”