From the Mayas to sixteenth-century England to Botswana, history is chock-full of examples that prove that the most important factor for a nation’s prosperity is its institutional structure.
Integrative institutions (i.e., political and economic institutions that involve the entire society) are what enable wide democratic participation in politics and the economy. They prevent resources from being overexploited and individual people from enriching themselves without benefitting the rest of society in any way.
Integrative institutions are characterized by a variety of individual rights, such as the freedom to choose a profession, access to education, and competitive, less-controlled markets for labor, capital, goods and services.
Nearly all nations that have achieved a high standard of living have integrative institutions. They set incentives for education, performance and innovation, and create a wider income distribution, preventing small elite groups from abusing their power and any potential profit from unfair competition.