growth and institutions

Abstract

A central question of economics is to understand why some countries are much poorer than others. Economists have long recognized that this relates to the fact that some countries have much less human capital, physical capital and technology than others, and use their existing factors and technologies much less efficiently. Nevertheless, these differences are only proximate causes in the sense that they pose the next question of why some countries have less human capital, physical capital and technology and make worse use of their factors and opportunities. This has motivated economists and social scientists more broadly to look for potential fundamental causes, which may be underlying these proximate differences across countries.