Human geography and the institutions that underlie economic growth

Abstract

Human geography is in a unique position to understand how local structural factors shape social, political, and ultimately economic outcomes. Indeed, the discipline has had much to say about the interaction between local institutions and the economy in general, and about how the broader institutions of society influence local economic development. Yet, to date, geographers have for the most part avoided debates on more generalized theories of economic growth and development. With the increasing recognition — among sociologists, political scientists and even economists — that explaining economic growth robustly requires taking into account the role of both formal society-wide institutions and local and sometimes informal institutions, geographers are in a position to make an important contribution. In order to do so, however, they will need to take greater account of the theories and developments that are taking place outside the discipline. Using the framework of community and society as complementary structural forces shaping development trajectories, this paper presents a broad overview of the principal theoretical and empirical developments in the institutionalist approaches to economic development and identifies areas in which geographical research could contribute to them.

Networks and regional economic growth: A spatial analysis of knowledge ties

“…Indeed, knowledge networks and the 'easy flow of ideas' have for a number of years been argued to be one of the key explanatory factors underlying the reasons why regions often grow and flourish (Glaeser et al, 1992;Gordon, 2013). An institutional perspective on these networks and flows would suggest that firms are incentivised to engage in networked activity through the availability of formal associational institutions such as chambers of commerce, business and trade associations, as well more informal institutions in the form of the geographic clustering of firms within which networked cooperation and collaboration is fostered through embedded norms and customs (Cooke and Morgan, 1998;Farole et al, 2011).…”

The Shared Challenges of Institutional Theories: Rational Choice, Historical Institutionalism, and Sociological Institutionalism

“…For example, Farole, Rodriguez-Pose, and Storper (2011) argued that both economic geographers (despite the centrifugal tendencies of the field) and social science institutionalists are interested in the underlying determinants of growth. Bathelt and Glückler (2014;Glückler & Bathelt, 2017) suggest that institutional theory can help economic geographers better understand the underlying dynamics of innovation.…”

“…Thus, for example, Farole et al (2011) pointed to the burgeoning literature on the sources of economic growth. They argued that institutionalism offers multiple benefits that economic geographers ought to take advantage of.…”

“…The interplay between experiential action and patterns of instituted expectations drives a recursive process of correlated interactions and transformative institutionalization. (p. 344) Similarly, Farole et al, (2011) said that:…”

Financial intermediation, infrastructure investment and regional growth

“…Given that they are network based, these clubs tend to be relationship intensive and to use community norms and conventions as substitutes for more formal governing devices such as contracts. These practices are often particular to a jurisdiction, and are not easily transferable from one place to another (Rodríguez-Pose & Storper, 2011). As shown below, these types of strategies have also been deployed in infrastructure investment.…”