History repeats? The rise of the new middle classes in the developing world

Bonn: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

Dt. Ausg. u.d.T.:

Das Wachstum der neuen Mittelschichten in Entwicklungsländern: wiederholt sich die Geschichte des Westens?

(Analysen und Stellungnahmen 16/2012)

The hundreds of millions of people in Asia, Latin America and Africa whose incomes have increased over the last decade or so have been called the “new middle classes” of the developing world. This group is getting bigger. Their unprecedented size — likely to reach the billions by mid-century — means that these new middle classes will play an important role in their countries and beyond.

If we define the middle classes as those who spend between US$ 10 and 100 (purchasing power parity, PPP) per day, by some projections this group will grow by more than one billion people in Asia alone in the next decade. The new middle classes will dwarf the “old” ones soon, shifting the centre of gravity of world consumption.

In the West, the middle classes are seen as a huge part of the success story of the post-war years. They are considered fundamental for sustained economic growth, democracy and good political institutions. If this happens in developing countries, then it will be good news. But will it? A simple replay of history is unlikely.

We do not know how society will change as incomes grow for millions of people in the developing world.

The new middle classes could become forces for political, economic and social change both domestically and globally. But the opposite can also happen: once well established, they could act conservatively to protect their own positions and prevent further social change. This uncertainty presents a diverse set of challenges for development policy.

First, people tend to use up more natural resources as they get richer. Reducing the environmental footprint of consumption must therefore be a global concern. Second, the growth of middle classes will not necessarily foster greater social inclusion. Development policy needs to prioritise reducing inequality as well as promoting growth. Third,
rising incomes will not automatically lead to Western- style democracy. Open political systems should be encouraged regardless of the outcomes of political processes. Fourth, improved global governance is not a given. International cooperation among countries with larger and more assertive middle classes may become more difficult and complex.

About the authors

Furness, Mark

Political Science

Scholz, Imme

Sociologist

Dzebo, Adis

Political Scientist

Further experts

Aleksandrova, Mariya

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Balasubramanian, Pooja

Social Economics 

Banerjee, Aparajita

Environmental and Resource Sociology, Public Policy 

Baumann, Max-Otto

Political Science 

Breuer, Anita

Political Scientist 

Brüntrup, Michael

Agricultural Economy 

Burchi, Francesco

Development Economy 

Dick, Eva

Sociologist and Spatial Planner 

Dombrowsky, Ines

Economist 

El-Haddad, Amirah

Economy 

Fasold, Maximilian

Political Economy 

Faus Onbargi, Alexia

Political Science 

Haldenwang, Christian von

Political Science 

Hein, Jonas

Geography 

Hernandez, Ariel

Economy 

Houdret, Annabelle

Political Scientist 

Lehmann, Ina

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Leininger, Julia

Political Scientist 

Malerba, Daniele

Economy 

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Development Economics 

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Agricultural policy economics 

Nowack, Daniel

Political Science 

Rodríguez de Francisco, Jean Carlo

Ecological economy 

Roll, Michael

Sociology 

Schoderer, Mirja

Environmental Research 

Schüpf, Dennis

Economics