I discuss correlations between the historical growth of social capabilities and patterns of economic growth across world regions since the industrial revolution and especially in recent decades. Based on this analysis, I argue that the apparent relationship between institutions and economic...

We revisit the debate over whether political institutions cause economic growth, or whether, alternatively, growth and human capital accumulation lead to institutional improvement. We find that most indicators of institutional quality used to establish the proposition that institutions cause...

The fundamental importance of economic institutions for economic growth through their impact on technological change has long been argued by Schumpeter and others. Recent empirical studies have reconfirmed such arguments. However, our understanding of the impacts of economic institutions on R&D...

It is widely acknowledged that underground (unrecorded) economic activities play a major role in transition economies. Evaluations of the success and failure of the transition experience should therefore be based on total economic activity [TEA], namely, the sum of recorded and unrecorded...

This paper provides an evidence-based evaluation of the competing ways of explaining and tackling the informal economy. Conventionally, participants have been viewed as rational economic actors who engage in the informal economy when the benefits outweigh the costs, and thus participation is...

The government’s ability to deliver inclusive growth crucially depends on the quality of governance. This paper reviews the linkages between governance and inclusive growth, and key policies to improve governance. The policies include (1) structural reform, automation, improving rules and...

Estimations of the shadow economies for 120 countries, including developing, Eastern Europe and Central Asian and high income OECD countries over 1999 to 2006 are presented. The average size of the shadow economy (as a percent of "official" GDP) in 2004/05 in 76 developing countries is 35.5%, in...

Estimations of the size and development of the shadow economy for 145 countries, including developing, transition and highly developed OECD economies over the period 1999 to 2003 are presented. The average size of the shadow economy (as a percent of "official" GDP) in 2002/03 in 96 developing...