Institutions and Economic Growth : A Survey of the Recent Empirical Evidence

We take up the recent discussion about institutions, governance and geography. The main result of this debate is that institutions matter, be they the fundamental cause of growth or not. We first discuss economic institutions safeguarding economic freedom, including the role of
the judiciary, then political institutions, especially democracy. While there is a large consensus that economic institutions matter for economic growth, the opinions with respect to political
institutions as well as the empirical results differ quite a lot. Then we turn to institutions especially relevant for Switzerland: direct democracy and (fiscal) federalism. There is no indication
that these institutions hamper economic growth. We conclude by asking for possible consequences of the empirical results presented.