We estimate the respective contributions of institutions, geography, and trade in determining income levels around the world, using recently developed instruments for institutions and trade. Our results indicate that the quality of institutions 'trumps' everything else. Once institutions are...

The most important event in human economic history before the Industrial Revolution was the Neolithic transition from a nomadic hunter-gatherer lifestyle to sedentary agriculture, beginning about 10,000 years ago. The transition made possible the human population explosion, the rise of...