Institutions

Among economists such as Dani Rodrik and particularly economic historians such as Daren Acemoglu and Douglass North, ‘good institutions’ are regarded as the key deep determinant of economic growth. If there is a conventional orthodoxy about the most important deep determinant — then it is institutions. Geography, goes this argument, is not unimportant but the problems manifest by bad geography can be overcome by good institutions. Tropical diseases (to pre-empt discussion from Chapter 11) are more likely to find cures if pharmaceutical firms have incentives to invest in relevant R&D, or countries that are landlocked are more likely to find investors willing to build transport links to overcome that isolation if those investors receive sufficient protection.