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Economic growth related to mutually interdependent institutions and technology

Published online by Cambridge University Press:  23 October 2009

RICHARD G. LIPSEY
RICHARD G. LIPSEY*
Affiliation:
Emeritus Professor of Economics at Simon Fraser University, Vancouver BC, Canada
*
*Email: [email protected]
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Abstract:

This paper argues that technological advance is a necessary condition for sustained economic growth. Technologies and institutions co-evolve in a system of mutual causation. Although some institutions inhibit growth while others encourage it, no single institution is either necessary or sufficient to produce sustained growth. However, some non-unique bundle of encouraging institutions is necessary. Sustained growth began with the Industrial Revolutions that did not just ‘fall out of the blue’ but were instead the culmination of three trajectories of technological advance in steam power, electric power, and the mechanization of textile manufacturing. These stretched over several centuries. Growth then became sustained when the West ‘invented how to invent’. A necessary condition for the Industrial Revolutions was Western science whose roots lie as far back as the scholastic philosophers and the medieval universities. Its absence elsewhere is a sufficient reason why no other place developed its own indigenous industrial revolution.

Type
Research Article
Information
Journal of Institutional Economics , Volume 5 , Issue 3 , December 2009 , pp. 259 - 288
Copyright
Copyright © The JOIE Foundation 2009

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