"Middle-income Trap" And Service-oriented Government

As the second largest economy in the world with a population of one-fifth of the world's population,China is a driving force for global economic growth and a potential danger.As China's economic growth rate declines and various problems occur frequently,China can be widely discussed by all sectors of society across the"middle income trap." But to this day,the academic community still has no unified and clear understanding of the concept of "middle income trap." Therefore,exploring the concept and causes of the "middle income trap" helps to enrich the theory.This paper logically sorts out the concept of "middle income trap" and explores its historical origin,performance and connotation.It believes that the "middle income trap" is still essentially a problem of economic growth.Speculatively explain the"comparative advantage vacuum"and explain why middle-income countries have comparative advantages in both aspects from the perspective of path dependence,but still face the "comparative advantage vacuum",comparative advantages are higher technical level than high-income countries,higher than Lower labor costs in the income countries.Government-driven is a crucial cause of a country's economic growth,especially in developing countries.The paper also explores the service-oriented government's economic growth by helping consumers break the self-sufficient production model,reduce transaction costs between firms and form a market of a certain size,and help entrepreneur complete early capital accumulation.With the advancement of the industrial revolution,the market spontaneously bred more entrepreneurs and the economy achieved fission.However,once the market is unable to spontaneously breed more entrepreneurs under the organization of a fair and just government,it may lead to a decline or stagnation in economic growth.The innovations of this paper include:(1)Using a theoretical model to prove that a country may hinder the country's economic development due to institutional factors,leading to a balanced economy at a lower level.(2)Exploring in detail the transformation of government functions and the role of government quality in economic growth and the path of influence,mining the influence of institutional factors in a country's economy and verifying its impact level in empirical models.The conclusions of this paper include:(1)Government consumption expenditure significantly promotes economic growth in the low-income stage and increases the initial capital accumulation of enterprises.The long-term development of the economy still needs to rely on transforming government functions,improving the business environment,and stimulating the vitality of the private economy.(2)By reducing corruption and the loss of institutional changes,economic growth in middle-income countries and high-income countries can be effectively promoted.