Overall, I find strong support for the claim that the quality of government services and the level of corruption matter mightily. Clearly, other factors also matter, including the size and ownership of the firm, the fairness of the legal system, the level of competition, the tax rate, the...

Algan and Cahuc (2010) argue that “inherited trust†is a key factor in explaining growth rates across countries. They derive a measure of inherited trust by linking respondents' “home countries†in the United States General Social Survey (1972-2004) and the 2000 wave of the...