Total Factor Productivity & the Quality of Social Institutions: Institutional Complementarities as Key Drivers of Balanced Innovation

We suggest a macro-socioeconomic framework that stresses the relevance of systemic features of national growth models for productivity outcomes to allow for highlighting national peculiarities. A prominent feature of domestic growth models are institutional settings that vary from case to case but where some key institutions are characteristic for particular groups of economies. We label such groupings as productivity regimes. The term social institution refers to a broader array of analytical concepts, which have in common that they focus on regular patterns of behaviour of economic actors that result in structural features as well as of normative beliefs or narratives held by individuals and collectives that account for these regularities. Our analysis makes use of such a concept of social institutions but adds a much more comprising list of variables that make up critical social institutions, which guide economic processes and eventually produce particular outcomes.