Inequality, institutions and progress: A debate between history and the present

Abstract

This article analyses current attempts to interpret the factors underlying long-term economic growth, paying special attention to the Latin American case. It discusses both the interpretations whose advocates claim that geographic conditions have a decisive role in shaping the development process and those according to which colonization is seen as giving rise to an institutional framework ill-suited for development. The author -based on his own estimates- emphasizes the importance of market access and the effect of social fragmentation on the establishment of an efficient and credible institutional framework. The article concludes with a discussion of the impact of inequality on both the quality of institutions and the dynamics of growth.