IDEAS home Printed from https://ideas.repec.org/p/nbr/nberhi/0066.html
   My bibliography  Save this paper

Factor Endowments: Institutions, and Differential Paths of Growth Among New World Economies: A View from Economic Historians of the United States

Author

Listed:
  • Stanley L. Engerman
  • Kenneth L. Sokoloff

Abstract

Many scholars are concerned with why the U.S. and Canada have been so much more successful over time than other New World economies. Since all New World societies enjoyed high levels of product per capita early in their histories, the divergence in paths can be traced back to the achievement of sustained economic growth by the U.S. and Canada during the 18th to early 19th centuries. This paper highlights the relevance of differences in the degree of inequality in wealth, human capital, and political power in accounting for the variation in the records of growth, and suggest that the roots of inequality lay in differences in the initial factor endowments of the respective colonies The large concentration of Native Americans, and the suitability of cultiva- ting sugar and other crops were key in generating extreme inequality. This encouraged the evolution of societies where small elites of European descent held highly disproportionate shares of the wealth, human capital and political power, and dominated the population economically and politically. Absent from the nearly all-inclusive list of New World colonies with these conditions were the British settlements in the northern part of the North American continent. Next, we discuss the tendencies of government policies to maintain these conditions along the respective economy's path of development. Finally, we explore the effects of inequality on the evolution of institutions conducive to participation in the commercial economy, markets and technological change during this specific era, and suggest that their greater equality in wealth, human capital, and political capital and power may have predisposed the U.S. and Canada toward earlier realization of sustained economic growth.

Suggested Citation

  • Stanley L. Engerman & Kenneth L. Sokoloff, 1994. "Factor Endowments: Institutions, and Differential Paths of Growth Among New World Economies: A View from Economic Historians of the United States," NBER Historical Working Papers 0066, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberhi:0066
    Note: DAE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/h0066.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luigi Pascali, 2017. "The Wind of Change: Maritime Technology, Trade, and Economic Development," American Economic Review, American Economic Association, vol. 107(9), pages 2821-2854, September.
    2. Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(4), pages 570-615, August.
    3. Adrián Guisarri, 2003. "Intrigas del Crecimiento en Argentina," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 774-784.
    4. Bluedorn, John & Valentinyi, Akos & Vlassopoulos, Michael, 2009. "The Long-Lived Effects of Historic Climate on the Wealth of Nations," CEPR Discussion Papers 7572, C.E.P.R. Discussion Papers.
    5. Rosa Alonso i Terme, 2015. "Why Has Latin America Sped Up Ahead of the Philippines in Economic and Political Reform?," UP School of Economics Discussion Papers 201501, University of the Philippines School of Economics.
    6. Samuel de Abreu Pessoa & Pedro Cavalcanti Ferreira, 2004. "The Evolution of International Output Differences (1960-2000): from Factors to Productivity," 2004 Meeting Papers 576, Society for Economic Dynamics.
    7. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    8. repec:bla:metroe:v:68:y:2017:i:4:p:699-729 is not listed on IDEAS
    9. Rodrik, Dani, 2005. "Growth Strategies," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 14, pages 967-1014 Elsevier.
    10. Nemera Mamo & Sambit Bhattacharyya, 2018. "Natural Resources and Political Patronage in Africa: An Ethnicity Level Analysis," Working Paper Series 0418, Department of Economics, University of Sussex Business School.
    11. Arvind Subramanian & Francesco Trebbi & Dani Rodrik, 2002. "Institutions Rule; The Primacy of Institutions over Integration and Geography in Economic Development," IMF Working Papers 02/189, International Monetary Fund.
    12. Sébastien MARCHAND, 2010. "Historical and Comparative Institutional Analysis: Evidences from Deforestation," Working Papers 201016, CERDI.
    13. repec:ucm:wpaper:14-09 is not listed on IDEAS
    14. David Mitch, 2010. "Did high stakes testing policies result in divergence or convergence in educational performance and financing across counties in Victorian England?," Working Papers 10011, Economic History Society.
    15. Rafael Dobado González & Hector García, 2009. "Neither so low nor so short! Wages and heights in eighteenth and early nineteenth centuries colonial Hispanic America," Working Papers del Instituto Complutense de Estudios Internacionales 0914, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    16. repec:rfh:bbejor:v:7:y:2018:i:2:p:72-80 is not listed on IDEAS
    17. David Mitch, 2012. "Landed society, farm size and support for public schooling in 19th-century England," Working Papers 12014, Economic History Society.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberhi:0066. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.