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.