| Abstract | “Middle-income trap” is a significant theoretical and practical issue closely related to the sustainable economic and social development of a country. This paper explores the essence of “middle-income trap” and the way to surmount it. It reveals that the inner nature of “middle-income trap” lies in the institutional transition dilemma, which results essentially from the lack of a reasonable and clear definition of governance boundary among government, market and society that causes the coexistent and interrelated government failure, market malfunction and social anomie, and thus leads to stagnant transition from factor-driven to efficiency-driven and further innovation-driven economy. Moreover, this paper proposes that the proper way to surmount the “trap” consists in the reconstruction of national public governance mode, that is, to achieve the transformation from a development-oriented and omnipotent government to a public service-oriented and limited government, from factor-driven to efficiency-driven and further innovation-driven development, and from a traditional society to a modern civil society through defining a reasonable and clear governance boundary of government, market and society, thus establishing a national public governance mode featuring the interactive role of government, market and society. |