Understanding Currents of Long-Term Development

Abstract

This research work uses Acemoglu, Johnson and Robinson (AJR) seminal finding of reversal in distribution of income across the regions that European overtook as their overseas empire to examine long run growth theories in light of historical evidence. Using this reversal evidence as a benchmark according to which some of the more prosperous regions of non-European world in pre-colonial history have transformed themselves into the poorer societies as of contemporaneous comparison. Even though some of the poorer parts in the pre-1500-time frame are now counted among the most developed economies of today. This study tries to identify which of the deeper determinants of development e.g. geographical, cultural or institutional best explains such an empirical phenomenon in this paper. The research reveals that institutional explanation, due to its dynamism, has much more robust empirical and theoretical support in the literature to explain how the reversal might have taken place as compared to geographical and cultural explanations.