"The income gap between Barbados and Jamaica is now almost five times larger than at the time of independence. Since their property rights and legal systems are virtually identical, recent theories of development cannot explain the divergence between Barbados and Jamaica. Differences in macroeconomic policy choices, not differences in institutions, account for the heterogeneous growth experiences of these two Caribbean nations."
This is new NBER research from Peter Blair Henry and Conrad Miller called "Institutions vs. Policies: A Tale of Two Islands"
Merry Christmas to all!