Geografia Humana Cgsg

Article
Human geography and the
institutions that underlie
economic growth
Thomas Farole
World Bank, USA
Andre´s Rodrı´guez-Pose
London School of Economics, UK; IMDEA Social Sciences Institute, Spain
Michael Storper
London School of Economics, UK; Sciences Po, France
Abstract
Human geography is in a unique position to understand how local structural factors shape social, political, andultimately economic outcomes. Indeed, the discipline has had much to say about the interaction between
local institutions and the economy in general, and about how the broader institutions of society influence
local economic development. Yet, to date, geographers have for the most part avoided debates on more
generalized theories of economic growth and development. With the increasingrecognition – among
sociologists, political scientists and even economists – that explaining economic growth robustly requires
taking into account the role of both formal society-wide institutions and local and sometimes informal
institutions, geographers are in a position to make an important contribution. In order to do so, however,
they will need to take greater account of the theories anddevelopments that are taking place outside the
discipline. Using the framework of community and society as complementary structural forces shaping
development trajectories, this paper presents a broad overview of the principal theoretical and empirical
developments in the institutionalist approaches to economic development and identifies areas in which geographical
research could contribute to them.Keywords
community, development, economic growth, institutions, society
I Introduction
One of the central questions in mainstream
economics concerns the determinants of why
growth1 occurs over the long run and why different
places grow at different rates. Traditional
growth models usually attempt to explain
growth by the increasing accumulation of factors
of production – more capital andlabour reinvested
fromthe past in order to make today’s productivity
higher. These models stem from the
economics tradition known as ‘Harrod Domar’
and, despite ever more complex approaches,
retain frustratingly high ‘unexplained’ growth
factors, or residuals. In the face of these limitations,
attempts to improve results models have
Corresponding author:
Andre´s Rodrı´guez-Pose, LondonSchool of Economics,
Houghton Street, London WC2A 2AE, UK
Email: a.rodriguez-pose@lse.ac.uk
Progress in Human Geography
35(1) 58–80
ª The Author(s) 2010
Reprints and permission:
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10.1177/0309132510372005
phg.sagepub.com
58
crystallized recently around the study of how
institutions, both formal and informal, structure
and constrain the behaviour ofeconomic agents.
They integrate a concern with knowledge or
technology, by arguing that economies with
appropriate institutions also are more innovative
in the long run than those with inferior institutions
and adapt better to changes in the competitive
environment. In a relatively short time, researchers
have made considerable progress in showing
that institutions may ‘matter’ more foreconomic
growth than factor endowments (Acemoglu et al.,
2004; Rodrik et al., 2004). Nonetheless, this
literature, which tends to rely on economy-wide
quantitative studies at themacro level, has not yet
explained in a satisfactory way which institutions
matter, when they matter, and precisely how they
shape growth. Efforts to address these issues have
involved an emerging multidisciplinaryinterest
in the social, cultural and institutional determinants
of growth, thus expanding this ‘institutionalist
turn’.
While human geography has in recent
years become a highly fragmented discipline
(Johnston, 1998, 2003), in which the pursuit of
mainstream economic regularities has become
far from mainstream, we contend that understanding
whydifferent places develop differently
over...