Governance Coordination Costs and Productivity Stagnation in Mature Economies: A Structural Account of Institutional Scale

Advanced economies have experienced sustained productivity slowdowns despite continued technological advancement, capital accumulation and labour force expansion; in several jurisdictions aggregate growth has come increasingly from population rather than from output per worker. Existing explanations emphasise capital deepening, human capital, market concentration or innovation diffusion. This paper introduces a complementary structural account: the accumulation of governance coordination costs under institutional scale. As organisations expand in size, scope and regulatory exposure, oversight layers, authority nodes, compliance pathways and escalation protocols multiply. Such structures are necessary for accountability and risk control, and their cumulative effect is increasing decision latency, authority ambiguity, defensive behaviour and procedural overhead. We conceptualise this as Governance Coordination Cost (GCC): the aggregate resource and time expenditure required to align action with authorised decision pathways within complex institutions, and argue that in mature, highly regulated economies rising GCC constitutes a structural drag on productivity growth. The account is complementary rather than rival to existing explanations, and it implies that governance architecture is a design variable rather than an administrative backdrop.