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15 - Underlying Sources of Growth

Institutions and the State

from Part II - Factors Governing Differential Outcomes in the Global Economy

Published online by Cambridge University Press:  03 June 2021

By
James Foreman-Peck  and
Leslie Hannah
Edited by
Stephen Broadberry  and
Kyoji Fukao
Stephen Broadberry
Affiliation:
University of Oxford
Kyoji Fukao
Affiliation:
Hitotsubashi University, Tokyo
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Summary

This chapter explains how and why democracy, capitalism, and wealth have been correlated since 1870. It uses broadly the North, Wallis, and Weingast (2009) framework to demonstrate that representative political institutions and ready access to incorporation or similar enterprise forms have been mutually reinforcing and conducive to high living standards, widely shared. But linear development or convergence towards such ‘open access’ societies cannot be taken for granted. History suggests that the existence of workably attractive capitalist democracies is unlikely to prevent nationalist, revolutionary, and populist leaders continuing to fashion alternatives, whether by force or by democratic debate.

Keywords

Institutionseconomic growthopen-access societieselitescorporations.
Type
Chapter
Information
The Cambridge Economic History of the Modern World , pp. 418 - 441
Publisher: Cambridge University Press
Print publication year: 2021

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