Technological Choices and Growth: Empirical Approach

In this paper, I follow Glaeser et al. [2004] and agree to their criticism of those political institutional indicators that are popular in current literatures. However, I disagree that human capital is a more basic source of growth than are the insti-tutions. In fact, human capital or institutions are endogenous to the technologi-cal choices adopted by political elites in developing countries. Economies adopt improper technological choices will result in distorted institutions, such as weak constraint on governments and efficiency loss due to rent-seeking. Therefore, who is the decision maker of technological choices and his decision constraint are the key problems in the explanation of growth. I use the beginning democracy score as instrument to technological choices to capture the circumstances faced by political elites after World War II. Empirical results support that:technological choices are more exogenous source of growth than are human capital and institutions