The debate over the “Great Divergence” and the institutional basis of economic development

Abstract

This article brings together the main contributions of the recent historiography on East Asia which questions the traditional idea about the “exceptionalism” of European economic performance in the centuries prior to the industrial revolution. They suggest instead that divergence in their development paths was a rather late and abrupt phenomenon. The findings of this historiography reinforce, in the first place, the idea that commercial dynamism can occur within very different institutional frameworks. Second, they suggest that the emergence of sustained economic growth was the result of various causal factors which cannot be reduced to the gradual improvement of economic institutions and the development of more efficient markets. The article concludes with a brief reflection on the implications of this historiographical debate for our theorization on the basis of economic development.