Many favor cultural and environmental explanations of the nineteenth-century economic divergence between Europe and the rest of the world. This book, the product of over twenty years of research, takes a sharply different tack. It argues that political differences which crystallized well before 1800 were responsible both for China’s early and more recent prosperity and for Europe’s difficulties after the fall of the Roman Empire and during early industrialization.

Rosenthal and Wong show that relative prices matter to how economies evolve; institutions can have a large effect on relative prices; and the spatial scale of polities can affect the choices of institutions in the long run. Their historical perspective on institutional change has surprising implications for understanding modern transformations in China and Europe and for future expectations. It also yields insights in comparative economic history, essential to any larger social science account of modern world history.

Introduction

1 Space and Politics

2 Population, Resources, and Economic Growth

3 Formal and Informal Mechanisms

4 Warfare, Location of Manufacturing, and Economic Growth in China and Europe

5 Credit Markets and Economic Change

6 Autocrats, War, Taxes, and Public Goods

7 Political Economies of Growth, 1500-1950

Conclusion: Findings, Methods, and Implications

Notes

References

Acknowledgments

Index