Connecting the Arrows – Geography, Culture, Institutions and Economic Development

Abstract

The threads from the previous chapters are tied together to suggest that geography, culture and institutions together play a pivotal role in influencing economic development outcomes. In addition to directly influencing output, geography has proximate effects via culture and institutions. Empirical analyses also verify that aspects of culture affect the quality of institutions and directly influence modern economic development. Since the cultural data used is for preindustrial societies it avoids the reverse influence of economic progress on cultural values. Together the findings help explain the early divergence in standards of living across the world and also why these disparities are persistent. They also suggest that successful policies aimed at improving development outcomes should reflect the geographical constraints and cultural and institutional frameworks in which they are to take effect.