![]() ![]() This article argues that new institutionalists are guilty of the same sin committed by early growth theorists. ![]() Institutionalists posit that economic growth is a function of economic and political institutions. Still, why do some countries invest more in education and innovation? North ( 1990), Acemoglu and Robinson ( 2013) and other new institutional economists contend that differences in institutions can explain the differences in economic performance across time and space. ![]() Endogenous growth theories (Aghion and Howit 1992 Grossman and Helpman 1991 Romer 1990) emerged to answer the faithful call and argue that differences in research and development and human capital lead to differential growth in technical change and accumulation. Why are some countries rich and others poor? Since Solow ( 1956), the tentative answer has been differences in capital accumulation and technical change, but this was unsatisfactory since the theory failed to explain what accounts for these differences. ![]()
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