From Poverty to Prosperity Watch
By something like 1300 A.D., China was the most technologically advanced country in the world, with a large integrated population. According to the Lee model, it should have persisted indefinitely as the world technology leader. The explosive dynamics of the virtuous circle between population and ideas suggests that such technological leads should never be lost. Only a remarkable and persistent failure of institutions can explain how China fell so far behind Europe. A model in which institutions can stifle innovation could explain why China lost the lead, but it takes a model in which institutions can also stop inflows of ideas from the rest of the world to explain why, for more than 500 years, ideas developed in the west were not more systematically adopted in China.
Nick Schulz and I have a forthcoming book called From Poverty to Prosperity, in which we emphasize intangible factors that affect the standard of living. Ideas and institutions play a central role, as they do in the paragraph above from the Jones-Romer paper. Our book includes an interview with Romer.