Ideas, Leaders and Institutions in 19 Century Chile

Institutions matter for economic growth. Thus, the leaders who help to develop institutions, and their ideas and beliefs, must play a central role in any narrative that seeks to explain such growth. This leads to the appearance of institutional entrepreneurs, who act in a given cultural and political environment. We focus on the problem of state building, where formal institutions designed by leaders must be consistent with a given society’s existing informal institutions. We consider an analytical narrative focusing on the Chilean experience in the 19th century. This serves as an interesting quasi-natural experiment on the role of ideas, leaders, and institutions in the problem of economic growth and development.