The Effect of Geography and Institutions on Economic Development: The Case of Lodz

Economic development in the Polish city of Lodz was a function of both geography and institutions. Neither geographical nor institutional factors, if taken separately, was a sufficient condition for long-term development. Although the economic achievements of Lodz depended on environmental factors throughout the entire period before World War I, dynamic progress there had to await the establishment of a beneficial institutional background—a change from wool to cotton production, the abolition of a custom's border, and the construction of a railway system—in the nineteenth century.