2013/05/17 by H. C. Hillmann · 1 citation
Social Sciences · Economics, Econometrics and Finance · #Culture, Economy, and Development Studies #Historical Economic and Social Studies #Corruption and Economic Development
paper · doi:10.1146/annurev-soc-071811-145436
openalex publication_date 2013/05/17 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/15
What mechanisms account for the long-run differences in economic development across historical settings? Current scholarship has renewed the argument that institutions are essential for promoting market transactions, industrialization, trade, and economic growth. In particular, recent work in economic history offers valuable empirical and theoretical insights into the development of market-supporting institutions, their long-term consequences, and their relationship to state-building. The purpose of this review is to bring contributions in economic history to the attention of sociologists interested in the evolution of economic institutions. Drawing on salient historical cases, the article contrasts formal market-supporting institutions that are provided by the state with settings where such public provision fails and private-order institutions based on reputation effects within informal social networks offer an alternative. Moving beyond mere existence proofs that institutions matter, the review then discusses recent advances in understanding the precise mechanisms responsible for the persistent effects of institutions on economic development.