The statistics presented in Chapters 3 and 4 provide strong support for the theory of parties, time horizons, and technological progress that I develop in Chapter 2. Now, I turn to situating this theory in the broader literature on the politics of economic development.

In one important respect, the approach to the question of technological progress taken in this book runs counter to the state-of-the- art in political science regarding the underpinnings of economic development. The tension lies with the fact that, while my theory puts public policies at the center of the analysis, much of the contemporary scholarship maintains that capital owners’ investment decisions depend very little on the kinds of policies governments deploy. Instead, investors seek out environments where the prevailing preferences and institutions constrain the state's impulse to steal investment returns and where political configurations are in place that stabilize the macroeconomic and regulatory environment. Countries characterized by such constellations of preferences and institutions, the argument goes, are better able to lure investment, because they can reduce economic uncertainty. In other words, received wisdom today holds that political failures are the major constraints on economic development, not the kinds of policy solutions to market failures I have emphasized throughout this book.

This literature on political constraints poses an important challenge for this book, because it suggests that my focus on the supply of technology policies is misguided. Good institutions are the keys for investment and growth, not good policies. What are we to make of this critique? By focusing so singularly on the efficacious supply of market failure-reducing public policies, have we missed the plot and wasted our time? It will not surprise the reader that my answer to these questions is a vigorous “No.” While I have no doubt of the importance of a state constrained from stealing investment returns and from generating an unpredictable economic climate, I think that the institutions that produce those conditions are insufficient to generate growth via technological progress.