Download this Paper Open PDF in Browser

Social Institutions and Economic Growth: Why England and Not China Became the First Modern Economy

54 Pages Posted: 17 Mar 2011 Last revised: 23 Nov 2012

Avner Greif

Stanford University - Department of Economics; Canadian Institute for Advanced Research (CIFAR)

Murat Iyigun

University of Colorado at Boulder - Department of Economics; Harvard University - Center for International Development (CID); IZA Institute of Labor Economics

Diego L. Sasson

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: November 12, 2012

Abstract

The institutional foundation of economic growth extends beyond institutions that limit the grabbing hand of the state and effectively enforce contracts. Growth predicates on social institutions that foster the development and use of productivity-enhancing knowledge. In particular, growth-promoting social institutions (1) limit the individual-level downside risk associated with developing new useful knowledge and (2) mitigate the threat of violent responses to labor-saving innovations. This paper substantiates these claims by examining the role of social institutions in rendering England, and not China, the first modern economy. Its comparative and historical institutional analysis combines historical details and an endogenous growth model incorporating England's and China's pre-modern social institutions. The analysis also reveals that even when the elite design social institutions, social and cultural norms affect their form and that institutional forms matter, particularly due to institutions' unforeseen consequences.

Previous title: Risk, Institutions and Growth: Why England and Not China?

Keywords: institutions, risk, growth, development, innovations, poor relief, culture

JEL Classification: O10, O31, O43, N10

Suggested Citation

Greif, Avner and Iyigun, Murat and Sasson, Diego L., Social Institutions and Economic Growth: Why England and Not China Became the First Modern Economy (November 12, 2012). Available at SSRN: https://ssrn.com/abstract=1783879 or http://dx.doi.org/10.2139/ssrn.1783879

Avner Greif (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
650-725-8936 (Phone)

Canadian Institute for Advanced Research (CIFAR) ( email )

180 Dundas Street West, Suite 1400
Toronto, Ontario
Canada

Murat F. Iyigun

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309
United States
303-492-6653 (Phone)
303-492-8622 (Fax)

Harvard University - Center for International Development (CID) ( email )

One Eliot Street Building
79 JFK Street
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Diego L. Sasson

affiliation not provided to SSRN ( email )

Paper statistics

Downloads
748
Rank
6,309
Abstract Views
5,410