Institutions and Economic Growth in the Atlantic Periphery: The Efficiency of the Portuguese Machinery of Justice, 1870–1910

The comparative economic performance of nations over the long run has been a major field of interest for some time now, both in Economic History and in Growth Economics. Thanks to the recent availability of macroeco-nomic data for many Western countries, its analysis has become possible using endogenous models which take into account the usual variables in the Solow formulation plus control variables, such as human capital, technology, or social capability. While recognizing the relevance of institutional factors, economic historians have appeared reluctant, however, to incorporate them formally into their equations.1 This is particularly evident in the abundant historical literature on the economics of growth and convergence during the so-called “first era of globalization” (Baumol, 1986; Bordo et al., 2003; O’Rourke and Williamson, 1997; 1999; Pamuk and Williamson, 2000).2 The classic work by O’Rourke and Williamson (1999), which quantifies in detail the causes of catch-up and convergence within the late nineteenth-century Atlantic economy, dismisses institutional influences on the grounds that open economy forces provide adequate explanation for the differential behavior of these economies. The assumption is that during the nineteenth century “the State took a broadly liberal policy stance” (p. 14) and institutional divergence among nations can therefore be treated as marginal to the problem under consideration.