The Last Instance: Are Institutions the Primary Cause of Economic Development?

DRI Working Paper No. 11
By Adam Przeworski, Department of Politics, NYU

The Last Instance: Are Institutions the Primary Cause of Economic Development?
Following North, neo-institutionalists claim that institutions are the ”primary” cause of economic development, ”deeper” than the supply of factors and methods for their use, what Marxists would call “forces of production.” Yet while the conclusion is different, the historical narratives differ little across these perspectives. How, then, are such conclusions derived? Can anything be said to be ”primary”? I conclude that “causal primacy” is an answer to an incorrectly posed question. Institutions and development are mutually endogenous and the most we can hope for is to identify their reciprocal impacts.