Economic Development IN Historical Political Economy

Abstract

Understanding the primary causes of human prosperity is one of the most important endeavors for social scientists. Much research in the twentieth century followed a neo-classical approach that emphasized important factors such as physical capital, human capital, and technological change, but was nonetheless devoid of historical and political context. In recent decades there has been a resurgence of political and historically embedded explanations of economic development, which have greatly expanded upon the works of early political economists such as Adam Smith, John Stuart Mill, and Karl Marx. This chapter provides an overview of this recent research on geography, institutions, and human capital, along with their interactions, as drivers of long-term economic development. The chapter then moves beyond these paradigms to argue that many historical political economists have largely overlooked explanations focused on state capacity and state-led development. A better understanding of the state should help scholars identify paths to break away from the low-growth equilibrium of less-developed countries.