Institutions and US regional development: a study of Massachusetts and Virginia

In: Journal of institutional economics, Volume 5, Issue 2, p. 181-205

Abstract

AbstractThe development of the American economy was accompanied by significant spatial income inequalities between the northern and southern regions. While many factors contributed to northern industrialization and southern stagnation, an important factor was differences in the region's institutions. In the North, a democratic institution fostered growth whereas in the South, oligarchic institutions favored status quo. To gain insights on the nature and causes of this divergence, this paper examines the development of political and legal institutions in Massachusetts and Virginia, the two leading states in the North and the South.