History Lessons: Institutions, Factor Endowments, and Paths of Development in the New World

Abstract

This occasional feature will discuss episodes and events drawn from economic history that have lessons for current topics in policy and research. Responses to this column and suggestions for future columns should be sent to Kenneth Sokoloff,

The Persistence of Inferior Cultural-Institutional Conventions

“…A more plausible answer -proposed in a variety of models and documented with historical and contemporary examples -is that the distribution of political power allows favored groups to command a larger slice by means of policies that result in a smaller pie (Sokoloff and Engerman (2000), Acemoglu (2003), Krusell and Rios-Rull (1996)). The hypothesis that Pareto-dominated allocations are implemented as part of a strategy of distribution is readily motivated by problems of commitment.…”

Institutions, inequality, and long-term development: a perspective from Brazilian regions

“…54 Voltaire, for example, considered the conflict in North America (mainly in what is now Canada) between the French and the British during the Seven Years" war (1756-1763) to be madness and characterized the two countries as "fighting over a few acres of snow" (as quoted by Sokoloff and Engerman 2000, p. 217). Haiti, in 1790 (on the eve of its revolution), was probably the richest (although extremely non-egalitarian) society in the world in terms of income per capita (see Sokoloff and Engerman 2000). As we can see, this theory is closely related to the ideas presented in Acemoglu, Johnson, and Robinson (2002) discussed elsewhere in this paper.…”

Assessing regional integration and business potential in the Western Balkans

“…The institutional 'dimension' of economies has been particularly stressed in recent research (Hall and Jones, 1999;Sokoloff and Engerman, 2000) and it has been broadly sustained that a country's institutions are invariably significant for cross-country differences in GDP per capita. The institutional framework has a fundamental role in explaining growth since it forms the environment within which the various actors operate.…”