Institutions, social capability, and economic growth

- The social capabilities of nations formed slowly in response to their forms of economic and social organization.
- Social capabilities have been persistent over long periods.
- Social capabilities in 1500 C.E. are good predictors of income differences today, once colonial and postcolonial migrations are accounted for.
- Social capabilities in 1500 C.E. are largely explicable by differences in history of agrarian civilization.
- Since 1960, less developed countries populated by descendants of earlier developed societies have seen more rapid growth than others.

I discuss correlations between the historical growth of social capabilities and patterns of economic growth across world regions since the industrial revolution and especially in recent decades. Based on this analysis, I argue that the apparent relationship between institutions and economic growth results in part because better institutional performance goes hand in hand with more advanced social capabilities.