Developing countries face uncertain trajectories for growth in the twenty-first century, with many finding themselves a ‘middle-income trap’. Extant theories in the politics of development that focus on domestic institutional strength and weakness represent necessary but not fully sufficient explanations for the trajectories of middle-income countries. In order to explain uncertain and uneven development outcomes in an era of heightened globalisation, this article seeks to explore the impact of international institutions, specifically the post-Cold War structures of trade and investment and global value chains, on the possibilities for growth for middle-income countries. The particular character of rules and norms defining trade and investment and the power dynamics behind their design suggest that international institutions as well as domestic factors explain disappointing and increasingly unequal development outcomes among middle-income countries.