Inequality, Institutions, and Growth

Why do some countries develop institutions conducive to growth (broad-based democracy), while others fail to do so? Stanley L. Engerman and Kenneth R. Sokoloff have an explanation.

we highlight the relevance of stark contrasts in the degree of inequality in wealth, human capital, and political power in accounting for how fundamental economic institutions evolved over time. We argue, moreover, that the roots of these disparities in the extent of inequality lay in differences in the initial factor endowments (dating back to the era of European colonization). We document -- through comparative studies of suffrage, public land, and schooling policies -- systematic patterns by which societies in the Americas that began with more extreme inequality or heterogeneity in the population were more likely to develop institutional structures that greatly advantaged members of elite classes (and disadvantaging the bulk of the population) by providing them with more political influence and access to economic opportunities.

Brad DeLong describes this as though it were all about temperate vs. tropical climates. From the abstract (I have not read the paper), it would seem to me that their analysis is more flexible than that.

Discussion Question How would a narrow base of land ownership and a narrowly-based government tend to reinforce one another?