The Role of Institutions in Economic Disparities

This chapter explores the critical impact of institutions on economic outcomes and disparities between countries, shifting the focus from traditional determinants of growth to the foundational rules governing behavior. It discusses the evolution of research methodologies, highlighting innovations like randomized control trials that help investigate the causal relationships between institutions and income levels. The chapter also addresses the challenges of conducting experiments in collaboration with governmental and civil society actors to derive meaningful insights about institutional rules.