Tom Oddgeir Johnsen

BI Norwegian School of Management GRA 5915 Pol. Econ & Macro

Institutions and long-term economic growth the Holy Grail of political economy

Exam code and name: GRA 5923 Pol. Econ & Macro Hand in date: 09.12.10

Campus: BI Oslo

Program: Master of Science in Political Economy

Table of Contents
1.0 Introduction ....................................................................................................... 1 2.0 Definitions of the Concepts ............................................................................... 1 3.0 The Logic ........................................................................................................... 2 4.0 Discussion .......................................................................................................... 3 4.1 The Two Koreas ............................................................................................. 3 4.2 Colonisation ................................................................................................... 4 4.2.1 Legal Origin ............................................................................................ 4 4.2.2 Settler Mortality ...................................................................................... 5 4.3 Inequality ....................................................................................................... 6 4.4 The Tale of Two Islands ................................................................................ 6 4.5 Operationalising institutions .......................................................................... 7 4.6 Alternative explanations ................................................................................ 8 4.6.1 Culture ..................................................................................................... 8 4.6.2 Geography ............................................................................................... 9 5.0 Conclusion ......................................................................................................... 9 6.0 Literature ......................................................................................................... 11

Summary

This paper is a literature review that will look at some of what is written about the connection between institutions and long-run economic growth. This relationship has been called the Holy Grail of political economy. Ever since Adam Smith wrote Wealth of Nations in 1776, scholars have dared to approach the question of whether institutions cause economic growth or not, and if so, what institutions? There have been provided many convincing answers. However, scholars have yet to present the definitive answer to the question. One of the challenges is the operationalisations of institutions. It is unfortunately easy to define institutions based on their outcome rather than what they are. The problem that any generalisation of findings faces is that the set of institutions are particular to the society they belong. Another challenging aspect is that a number of institutions are informal. Further, there are serious difficulties in controlling for any conceivable effect with regard to institutions effect on long-term growth. It might be that the quest for growth will forever remain a Holy Grail for political economists.

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1.0 Introduction Why are some countries richer than others? Why do some countries fail to grow while some catch up with the rest of the world? These are some of the fundamental questions of social science. The idea that institutions matter for economic growth has been around for a long time. Adam Smith (1776) is famous for his criticism of the corrupt mercantilist state and praise for the incentives in the free market. The explanations for economic growth have become more diverse (and technical) today than it was at Adam Smiths time1. This literature review will look at the connection between institutions and long-run economic growth. This is a relationship that Acemoglu et al. (2005: 464) describes as the Holy Grail of political economy. First, the concept of institutions is discussed. Thereafter, the logic of institutions is presented. Thirdly, some important literary discussions based on the relationship between institutions and economic growth is presented. Fourthly, alternative explanations for long-term growth will shortly be illustrated. Finally, there will be some concluding remarks. The purpose of this essay is to review literature is to lend support to or oppose what Douglass North (1990) claims is the relationship between institutions and economic performance.

2.0 Definitions of the Concepts In order to study institutions effect on economic growth it is important to operationalise both concepts. Economic growth is often straightforward. It is measured as growth or decline in GDP per capita or real purchasing power. This is simple to quantify and the numbers have meaning to most. Institutions are trickier to define. It is the seminal work of North that has provided the most popular definition of institutions. The definition by North (1990: 3) most widely cited is found in his book Institutions, institutional change and economic performance from 1990. It reads that Institutions are the rules of the game in a
society or, more formally, are the humanly devised constraints that shape human interaction. This leads us to the question of what institutions do. According to

North (1990: 3f) they structure incentives in human exchange, whether political,
1

The focus of this paper is historical so there will not be focused on the growth models from formal economics. 1

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social, or economic[]institutions define and limit the set of choices of individuals. Institutions sound like they could be anything.

What do these definitions mean? The phrase rules of the game seems uncomplicated. For example, constitutions and legislation are often put forward as the most obvious institutions in society. However, North (1990: 4) did not intend for this to be interpreted exclusively as formal institutions. In fact, rules of the game can just as easily be of an informal character. For instance, as Hayek (1978) argued years ago, there are fundamental differences between what we call law and what we can call legislation. The crucial insight is that a legislator is not necessarily a law maker. In other words, the law is constituted by its adherence in society. This is why we often find ourselves acting in accordance with some unwritten rules of the game without necessarily fearing any formal or legal sanction. We let people off the bus before we ourselves enter it, and we expect that our fellow citizens do the same. Other times we find ourselves acting contrarily to written law. In the middle of the night we might for instance cross an empty road although the traffic light shows a red man. If we were to be fined for crossing the road without the green man being lit we would feel unfairly treated. So, the law can diverge from legislation. This tells us that there can be a profound difference between what we call law (legislation) and what we recognise as the law. This illustrates the fact that informal institutions might be just as real as formal institutions. In fact, formal institutions might not as accurately depict the rules of the game in society as informal institutions. The latter can often tell us how certain things are actually done. Some variables are fundamentally unobservable. This fact points to an underlying problem of the literature. It is practically impossible to control for any thinkable effect in the past.

3.0 The Logic The basic assumption is that institutions provide incentives and constrains on agents behaviour. This in turn has an effect on what activities are undertaken (for a brilliant insight to the logic, see Olson (1993)). Leeson (2009) has written about constitution-making among pirates and how this made the pirates more efficient and the pirate ship a more attractive workplace. The fascinating story goes that this had a positive effect on their economic returns (for a broader investigation of
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constitutions and economic growth, see Persson and Tabellini (2003)). Leesons (2009) work provides a brilliant micro narrative that explains well why institutions are made, what function they have and why they are sustained. The assumption that will be reviewed in this paper is that countries experiencing economic growth have institutions that are geared toward economic activity that promotes growth. For instance, the protection of property rights is generally seen as important for economic growth. Constraints are in place if one has credible courts that restrain other agents from stealing or avoiding one to use ones property. Thus, incentives are provided for investment and improvement of ones property or for using the property as collateral for credit for economic activity. Individual economic activity and risk-taking are prerequisites for economic growth. This is also true in the long-term. This type of behaviour is either induced or deterred by institutions. Or so the argument goes.

4.0 Discussion In the literature on institutions and economic growth the emphasis is often on the division of Korea and/or the colonisation of large parts of the world by Western Europeans. These are considered natural experiments. These data are ones in which the treatment comes from nature (i.e. not from the researcher).

4.1 The Two Koreas Both Acemoglu et al. (2005) and Glaeser et al. (2004) have looked at the division of Korea into North (NK) and South (NK). Acemoglu et al. (2005) argue that these two regions were similar at first. If anything, NK had a greater availability of natural resources than SK at the time of the division. The differences started when NK decided to implement a Socialist regime while SK implemented a liberal regime based on a market economy. Thus, the institutional set-up was different from the start. Today the difference in living conditions could hardly be more different. In 2000, the GDP per capita in NK was 1000 USD while the corresponding number for SK was 16,100 USD. According to the Acemoglu et al (2005) the only plausible explanation of this difference is institutional. However, Glaeser et al. (2004) point to the fact that both NK and SK were dictatorships at first. Thus, they had a common institutional set-up. Accordingly, their explanation
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for the institutional difference between the countries today stem from the difference in economic performance since the 1950s and not the other way around. The causality that Glaeser et al. (2004) argue in favour of is reverse compared to Acemoglu et al. (2005). The understanding of the former is that economic performance explains institutional differences. The main finding is summed up by Glaeser et al. (2004: 285): the evidence that institutions cause economic growth, as opposed to growth improving institutions, is non-existent. In this view one needs the accumulation of human and physical capital in order to start the process of democratisation and institutional improvement. This implies that dictators are just as capable as democratic leaders to secure property rights given that they are pro-market. This is similar to arguments put forward by defenders of the current Chinese regime: first growth then democracy.

4.2 Colonisation
4.2.1 Legal Origin

La Porta et al. (1997; 1998) emphasise the role of the legal system of the colonisers for an areas economic growth. The divide is between British common law and Roman civil law. The French, the Spanish and the Portuguese colonisers brought the civil law system. This is exogenous to the characteristics of the colonised countries/areas and therefore a well-suited aspect to look at in order to disentangle the treatments (different institutions) effect on economic growth. It is argued that common law countries have less corruption, greater financial development, lower numbers of unemployment and a smaller shadow economy (La Porta et al. 2008). Common law countries have less judicial formalism which in turn is associated with less dishonesty, less unfairness, and more consistency in the proceedings (Djankov et al. 2003). These are signs of a healthy economy. The real strength is that countries with common law origins are geared toward stronger investor protection, have less regulation and government ownership compared to countries with civil law origins (La Porta et al. 1998). This in turn causes more growth inducing behaviour and therefore leads to more economic growth. Interestingly, even within the US one have found substantial
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difference between the states that were first colonised by France, Mexico or Spain compared to the states colonised by England (Berkowitz and Clay 2005, 2006). However, legal origin is correlated with a host of other characteristics. Therefore it is likely that there is more in play than legal origins impact on investor protection, which was the main argument (Nunn 2009: 4). All the aforementioned factors can be thought of as having a great effect on economic development. There is much literature point to the economic importance of judicial systems. One thing that is missing is especially information on the Dutch and the legal system they brought with them. The Dutch had a considerable presence in South East Asia. For instance, they held Indonesia for a very long time. It is strange that the scholars of the legal origin literature (at least to this authors knowledge) do not mention or examine the Dutch impact on such a large country. Moreover, what was the Dutch legal systems effect on South Africas institutions? Acemoglu et al. (2005: 419) show that areas in which the Dutch had the best domestic economic institutions in the world. However, the areas which they colonised experienced unimpressive economic growth. As we shall see, it is argued that the colonisers implemented institutions of differing quality in different areas depending on the areas function (extraction or settlement).

4.2.2 Settler Mortality

Acemoglu et al. (2001) provide a different explanation based on the natural experiment of colonisation than the thesis of legal origin by La Porta et al. (1997; 1998). The logic is as follows: The colonies with less mortality experienced greater inflows from Europeans. In turn, these Europeans created an acceptable institutional environment with important protection of property rights. On the other hand, the Europeans in the colonies with high mortality, and therefore fewer settlers, had less incentive for promoting good institutions. Instead, these colonies got institutions that promoted rent-seeking and extractive behaviour. Acemoglu et al. (2001) find that there is a strong negative relationship between a countrys current institutional quality and the settler mortality in the past. They also find that institutional quality has a strong positive effect on per capita income. Acemoglu et al. (2001) provide an alternative to the explanation based on geographical differences.
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4.3 Inequality Another influential idea is that of Engerman and Sokoloff (1997; 2002). Their hypothesis is that great political and economic inequality in the colonies exerted a considerable effect on a colonys institutions. Colonies that because of favourable conditions for tradable crops relied heavily on slave labour had poor institutions. The reason is that the domestic institutions evolved around the aim to protect the elites interests and restrict the rest. However, it is not yet any consensus around the view that historical inequality is bad for economic growth. For instance, the Soviet Union should be a great example that equality does not necessarily have a beneficial effect on institutional quality. The same goes for Cuba. A quick observation is that Cubans flock to the US not the other way around, despite higher inequality in the US. Equal Cubans want to live in the US which scores worse than Cuba on the Gini index. The support for the inequality hypothesis in the literature appears weak. Acemoglu et al. (2008) show a negative relationship between political and economic inequality. At the same time, the authors found that there were a positive correlation between land inequality in the 19 th century and measures of economic development taking form of primary and secondary school enrolment numbers. However, the results were only derived from one state in Colombia. Thus, it is not valid for generalisation. There have also been studies showing that it is unfavourable for economic growth for a society to have experienced too little inequality. In the absence of such demanders as a group of elites, less public goods or infrastructure is produced (Dell 2008). There is evidence both for and against the argument that inequality leads to less long-term economic growth.

4.4 The Tale of Two Islands Henry and Miller (2009) have written a text which is very interesting. What one usually encounters are large theories and why/why not something is the cause for economic growth. Instead, this is a paper that takes a smaller natural experiment path but end up at a different result than Acemoglu et al. (2005) and La Porta et al. (1997; 1998). Barbados and Jamaica have very similar features. Both are in the Caribbean, were colonised by the British, have common law judicial systems, Westminster representative democracy, and constitutional protection of property
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rights and were islands with a large number of slaves working on sugar plantations. Additionally, both countries received independence in the 1960s (Jamaica 1962 and Barbados 1966). From 1960 to 2002, the growth in GDP per capita was three times higher in Barbados than in Jamaica. Henry and Miller (2009) make the case that the differences in growth rates are because of different macroeconomic policies, not different institutions. This is shown through a narrative based on Barbados making better choices in the face of the Oil Crisis in the early 1970s. This sort of research can be valuable for our understanding of the factors causing long-run economic growth.

4.5 Operationalising institutions In their analysis of institutions effect on economic growth, Glaeser et al. (2004) provides an analysis of recent research on the topic. They identify some typical operationalisations of the concept institution and find that many are incorrect. A number of analyses tend to confuse institutional outcomes with institutions per se. An example is Rodrik et al. (2004) who make use of an index on government effectiveness. Such a concept does not tell us anything about the nature of the institutions only their effect. Glaeser et al. (2004) applies the example of protection of property rights, which is a variable that is commonly thought of as contributing to economic growth, in order to prove this point. Their argument is that it does not take a democracy to protect property rights. In fact, there are empirical examples of dictators that respect property rights and thus would score positively on the index applied by Rodrik et al. (2004). However, borrowing Bastiats (1964) words, what is not seen is that a dictator can change policies immediately compared to the slowness of a parliament in a system with checks and balances. Thus, there is hidden risk for expropriation in dictatorships. This will not necessarily be reflected in risk indexes and calculations (Taleb 2007). The argument of Glaeser et al. (2004) is that human capital and not institutions create economic growth. Their perspective fails to take into account that institutions shape the demand for human capital. Thus, while they argue that they are in fact measuring something (human capital) that has nothing to do with institutions but crucial for economic growth. But it is not clear to this author that these two factors are not intertwined.
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4.6 Alternative explanations

4.6.1 Culture

Max Weber (1930) is famous for having written about the Protestant Work Ethic. His theory was inspired by observations in Baden in Germany of the fact that Protestant were wealthier than Catholics. Much of the theory is about Calvinism and that this religion instilled a particular Protestant work ethic in its believers. Weber (1930) built much of his theory on observations from the Dutch Republic2. Landes (1998), echoing Weber, contends that Catholic culture discouraged work and entrepreneurship on the part of wealthy Spaniards, further retarding economic development. Landes (1998: 522) concludes that "just because markets give signals does not mean that people will respond timely or well. Some people do this better than others, and culture can make all the difference". Albert Hyma (1938) presents convincing arguments about the fallacy of Max Webers (1930) thesis on the Protestant Work Ethic. The argument is twofold. Firstly, the trade numbers go against Webers predictions. It was in the areas of the Dutch Republic in which Calvinism was the least orthodox that trade flourished the most. It appears that, within the Dutch Republic, there was no systematic correlation between Calvinism and economic growth. Secondly, he presents empirical evidence of the resistance to accumulation of wealth and profiteering from lending that existed among the main Calvinist thinkers in the Dutch Republic. This does not preclude that culture did not have an important role for the Dutch Republics rise to prominence. However, a Protestant Work Ethic is hard to console with the evidence. Becker and Woessmann (2009) have recently examined Webers thesis. They concluded that Weber was right but the difference was not caused by culture. Instead it was the human capital amassed by Protestants from striving to be literate in order to read the Bible. There are reasons to believe that culture is important but it is complicated to disentangle its effect on economic growth. Most likely many of the institutional traits in a society are embedded in the culture and vice versa. This increases the challenges of multicollinearity and unbundling causal effects and simple correlation.
2

The name of approximately todays Netherlands (for Dutch history see Israel (1995)). 8

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4.6.2 Geography

Jared Diamond (2005 [1997]) has written a popular science book called Guns, Germs and Steel. This book confirms a widespread perception that economic growth is dependent on geographical factors. His book is also a refutation of those explanations which are primarily based on culture. The seed of civilisation was therefore surplus production of food which meant that society could specialise in for instance metallurgy. Together with becoming resistant to some bacteria from domestication of animals meant that certain parts of the world had Guns, Germs and Steel. An argument against the geographical hypothesis is made in the essay Reversal of Fortune by Acemoglu et al. (2002). In the article it is shown how the countries that were the wealthiest3 in 1500 became the poorest 500 years later. This argument is also one of the foundations of the argument that the nature of the institutions made by the colonisers had a great effect on later economic growth. The geographical thesis can have counterintuitive results. For instance, Nunn and Puga (2009) show how a rugged geography has been beneficial to regions in Africa. Weaknesses can be turned into strengths (Porter 1998).

5.0 Conclusion What one finds is that the institutional arguments from the colonial time are of two different natures. One implies that the legal system of a countrys colonisers is transplanted. These legal systems have different qualities which continue to have an effect on the colonised countrys economic growth long after independence is gained. The other argument is mainly about property rights. Europeans settled in countries that had favourable conditions. In the process they brought with them the well-working institutions of their home country in order to live under them. In the opposite case, the colonisers created their own that were geared toward extraction and rent-seeking. There are disagreements about the two Koreas and cases like it (for instance the two Germanies and Haiti/Dominican Republic). The criticism toward this line of research claiming relationships between institutions and economic growth is that the causality is in reality reverse. This means that economic growth
3

The proxies for wealth in 1500 in the study are urbanisation and population density. 9

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cause better institutions. First one must ensure economic growth, secondly one must introduce democracy. This is an argument one often hears from people that defend autocratic regimes. However, this line of literature often falls victim to the same mistake they accuse authors of the opposite view of doing. Both sets of authors tend to operationalise institutions through what effects they have rather than what they are. Generally, it appears that institutions is such a broad and contested concept that one should be careful with sweeping conclusions about its relation to economic growth. However, it is clear to see the positive effects the correct or the incorrect institutions can have. Still, according to Solow (2007: 5f), there are many economists that make it seem:
easy to increase the long-run growth rate. Just reduce a tax on capital here or eliminate an inefficient regulation there, and the reward is fabulous, a higher growth rate forever[]But in real life it is very hard to move the permanent growth rate; and when it happens[]the source can be a bit mysterious even after the fact

It feels natural to end the paper with an insight from Hall and Soskices (2001) work on Varieties of Capitalism. In this book one is informed that different societies have (and need) different institutional arrangement. For instance, Germany has a greater need for engineers than the US. Therefore, the relevant German institutions provide incentives to complete longer and more specific education than in the US. The conservative view might be that institutions matter but that they are particular. They are endogenous. One cannot adopt a complete system of successful institutions and expect that they will work their magic. Institutions are dynamic elements of society that serves a purpose and is there for a reason (Ostrom 1990, for another brilliant book on this subject see North et al. (2009)). There are some articles named unbundling institutions (Acemoglu and Johnson 2005; Bhattacharyya 2009). Yet, the literature on institutions impact on economic growth is weakened as it fails to satisfyingly operationalise the concept. Perhaps this is an impossible task? At least there is little reason to be so confident as to do as Professor Diamond (or his publisher) subtitling a book a short history of everybody for the last 13,000 years. Still, theories on long-run growth make for exhilarating reading. However, the connection between institutions and longterm growth remains the Holy Grail of political economy.
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6.0 Literature
Acemoglu, D, - Johnson, S., 2005. Unbundling Institutions. Journal of Political Economy, Vol. 113(5), pp. 949-995. Acemoglu, D. - Johnson, S. - Robinson, J.A., 2001. The Colonial Origins of Comparative Development: An Empirical Investigation. American Economic Review, Vol. 91 (5), pp. 1369-1401. Acemoglu, D. - Johnson, S. - Robinson, J.A., 2002. Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution. Quarterly Journal of Economics, Vol. 117 (4), pp. 1231-1294. Acemoglu, D, - Johnson, S. - Robinson, J.A., 2005. Institutions as a fundamental cause of longrun growth. Handbook of economic growth, pp. 385-472. Acemoglu, D. - Bautista, M.A. - Querubin, P. - Robinson, J.A., 2008. Economic and Political Inequality in Development: The Case of Cundinamarca, Colombia. pp. 181245 in Helpman, E. (ed.), Institutions and Economic Performance. Cambridge: Harvard University Press, Bastiat, F., [1848] 1964. Selected essays on political economy. In Huszar, G.B. (ed.) translated by Cain, S. Irvington-on-Hudson: Foundation for Economic Education. Becker, S. - Woessmann, L., 2009. Was Weber Wrong? A Human Capital Theory of Protestant Economic History, Quarterly Journal of Economics, Vol. 124(2), pp. 531-596. Berkowitz, D., - Clay, K., 2005. American civil law origins: implications for state constitutions. American Law and Economics Review, Vol. 7 (1), pp. 62-84. Berkowitz, D., - Clay, K., 2006. The effect of judicial independence on courts: evidence from the American states. Journal of Legal Studies, Vol. 35 (2), pp. 399-440. Bhattacharyya, S., 2009. Unbundled Institutions, Human Capital and Growth. Journal of Comparative Economics, Vol. 37, pp. 106-120. Dell, M. 2008. The mining mita: Explaining institutional persistence. Mimeo, MIT. Diamond, J., 2005 [1997]. Guns, Germs, and Steel: a short history of everybody for the last 13,000 years. London: Random House. Djankov, S. - La Porta, R. - LopezDeSilanes, F. - Shleifer, A., 2003. Courts. Quarterly Journal of Economics, Vol. 118 (2), pp. 453-517. Engerman, S., - Sokoloff, K., 1997. "Factor Endowments, Institutions, and Differential Paths of Growth among New World Economies," pp. 260-304 in Stephen Haber (ed.)., How Latin America fell behind. Stanford, CA: Stanford University Press. Engerman, S., - Sokoloff, K., 2002. Factor endowments, inequality, and paths of development among New World economies. National Bureau of Economic Research Working Paper No. 925. Glaeser, E. - La Porta, R. - LopezDeSilanes, F. - Shleifer, A., 2004. Do Institutions Cause Growth? Journal of Economic Growth, Vol. 9, pp. 271303. Hall, P.A. Soskice, D.W., 2001. Varieties of capitalism: The institutional foundations of comparative advantage. New York: University Press. Hayek, F. A., 1973. Law Legislation and Liberty, Volume I: Rules and Order, Chicago: University of Chicago Press.
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Henry, P.B., - Miller, C., 2009. Institutions versus Policies: A Tale of Two Islands. American Economic Review, Vol. 99 (2), pp. 261-267. Hyma, A., 1938. Calvinism and Capitalism in the Netherlands, 1555-1700. The Journal of Modern History, Vol. 10 (3), pp. 321-343. Israel, J., 1995. The Dutch Republic: Its Rise, Greatness, and Fall 1477-1806. Oxford, UK: Oxford University Press. La Porta, R. - Lopez-de-Silanes, F. - Shleifer, A., 2008. The Economic Consequences of Legal Origins, Journal of Economic Literature, Vol. 46 (2), pp. 285-332. La Porta, R. - Lopez-de-Silanes, F. - Shleifer, A. Vishny, R.W., 1997. Legal determinants of external finance. Journal of finance, Vol. 52 (3), pp. 1131-1150. La Porta, R. - Lopez-de-Silanes, F. - Shleifer, A. Vishny, R.W., 1998. Law and finance. Journal of political Economy, Vol. 106 (6), pp. 1113-1155. Landes, D., 1988. The Wealth and Poverty of Nations: Why Some are so Rich and Some so Poor. New York: W.W. Norton. Leeson, P., 2009. The invisible hook: the hidden economics of pirates. Princeton: Princeton University Press. North, D.,1990. Institutions, Institutional Change and Economic Performance. New York: Cambridge University Press. North, D. - Wallis, J. - Weingast, B., 2009. Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. Cambridge: Cambridge University Press. Nunn, N., 2009. The Importance of History for Economic Development. Annual Review of Economics, Vol. 1, pp. 6592. Nunn, N. Puga, D., 2009. Ruggedness: The Blessing of Bad Geography in Africa. NBER Working Paper 14918. Olson, M., 1993. Democracy, Dictatorship, and Development. American Political Science Review, Vol. 87 (3), pp. 56775. Ostrom, E., 1990. Governing the Commons: The Evolution of Institutions for Collective Action. New York: Cambridge University Press. Persson, T. Tabellini, G., 2003. The Economic Effects of Constitutions: What do the Data Say? Cambridge: MIT Press. Porter, M., 1998. On Competition. Boston: Harvard Business School Press. Rodrik, D. Subramanian, A. Trebbi, F., 2004. Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development. Journal of Economic Growth, Vol. 9, pp. 131-165. Smith, A., 1974 [1776]. An inquiry into the nature and causes of the wealth of nations. London: Penguin Books. Solow, R.M., 2007. The last 50 years in growth theory and the next 10. Oxford Review of Economic Policy, Vol. 23 (1), pp. 3-14. Taleb, N., 2007. The Black Swan. New York: Random House.
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Weber, M., 1930. The Protestant Ethic and the Spirit of Capitalism. London: Allen and Unwin.

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