Institutions, Organizations and Growth Program

The question of what makes some countries rich and others poor has vexed economists for more than 200 years.

Some factors (natural resource base, labour pool quality, research and development infrastructure, etc.) that affect the strength of a country’s economy are well understood. But surprisingly little is known about how and in what ways governments, unions, corporations, legal systems and other institutions affect economic growth.

This is most surprising because such institutions and frameworks have so clear an effect on a country’s ability to innovate, meet new challenges, and generate wealth. But the relationship is complex: institutions that foster prosperity in one culture, geographical location, or historical period may be detrimental in another.

CIFAR launched its Institutions, Organizations and Growth program in 2004 to take an integrated approach to this issue. Researchers contribute a wide range of historical, geographic, cultural, and economic data, which brings new context and sheds new light on which entities most effectively foster economic growth in particular circumstances.

Researchers in this program combine theoretical and historical studies with statistical analysis to see how countries that may have started with similar endowments followed different developmental paths. Their results have become even more important, as momentous political, social and economic shifts are transforming nations in the Middle East, Asia, Africa, and South America. There has never been a time when understanding the economic success and failure of nations has been more urgent, or more possible.