The Relationship Between Inclusive Institutions, Proximate Causes of Growth and Economic Growth: a Case Study of Four Mandate Territories, Lebanon, Palestine, Syria and Trans-jordan, 1918-1946/48
Abstract: This paper presents a comparative historical study of the economic growth in four Mandate territories, Lebanon, Palestine, Syria and Trans-Jordan. In all four areas, the ruling Western powers, Britain and France, attempted to introduce inclusive economic institutions with a strong emphasis on private property. In all four areas, the inclusive institutions advanced economic growth, but there were differences in the growth rates. For example, Palestine had the best growth even though the British were more successful in instituting inclusive institutions in Trans-Jordan than they were in Palestine since in Palestine there was also a huge increase in the proximate causes of growth which did not occur in Trans-Jordan. The paper suggests a refined formulation of the relationship between inclusive institutions, proximate causes of growth and economic growth. Inclusive institutions will cause economic growth but at a slow pace. If a country is able to enhance its proximate causes of growth through investment, then the joint effect of the proximate causes of growth with inclusive institutions will lead to much quicker growth.
