Institutional and Non-Institutional Explanations of Economic Differences

Economists have long been concerned with the explanation of differences across countries in levels of national income, population, and per capita incomes, as well as in their rates of growth. Because many of the processes of economic development operate over long periods of time, those studying the sources of these differences have quite naturally turned to the historical record for relevant evidence. Their concern with economic history thus comes not only from a desire to achieve a better understanding of the past, but also from a belief that such knowledge can serve as a guide for policymakers striving to improve the economic and social conditions of currently less developed nations. Many scholars have set about making contributions to knowledge through detailed investigations of the processes of growth in individual countries. Others have sought to discern what factors were crucial through comparative studies, focusing on issues such as why nations differed with regard to the timing of the onset of growth or how and why their records of achieved rates of growth varied over a long period of time.