An empirical finding by Gaspar, Jaramillo and Wingender (2016) shows that once countries cross a tax-to-GDP threshold of around 12¾ percent, real GDP per capita increases sharply and in a sustained manner over the following decade. In this paper, we attempt via four case studies - Spain, China,...

We analyze the role of risk-sharing institutions in transitions to modern economies. Transitions requires individual-level risk-taking in pursuing productivity-enhancing activities including using and developing new knowledge. Individual-level, idiosyncratic risk implies that distinct...

This paper studies the persistent impact of good institutions on economic development in China. By exploiting a British-driven institutional switch in part of China's customs stations in 1902, I find that counties that were more affected by the British customs institutions are also better...

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,...

Over the last millennium, the clan and the city have been the locus of cooperation in China and Europe respectively. This paper examines -- analytically, historically, and empirically -- the cultural, social, and institutional co-evolution that led to this bifurcation. We highlight that groups...