Abstract
Why are states important for economic growth and for the social transformations that go with it? Adam Smith (1776) and the Scottish enlightenment gave a first answer: the state can guarantee the institutions enabling individuals and firms to engage in economic activities that bring economic growth.The institutional infrastructure around contract, property, tort law, and incorporation allows the exchange of goods and services as well as the accumulation, lending, and investing of capital to proceed with a reasonable degree of ease, security, and predictability.This idea is also at the core of Max Weber’s (1968) analysis of the role of law in the rise of capitalism, and it is similarly central to the theoretical framework of the economic historian and Nobel Laureate Douglass North (e.g., 1981).
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© 2005 Matthew Lange and Dietrich Rueschemeyer
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Lange, M., Rueschemeyer, D. (2005). States and Development. In: Lange, M., Rueschemeyer, D. (eds) States and Development. Political Evolution and Institutional Change. Palgrave Macmillan, New York. https://doi.org/10.1057/9781403982681_1
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