Check out this article in prep. for Yuen Yuen Ang's Tuesday Complex Systems Seminar: http://blogs.worldbank.org/developmenttalk/review-how-china-escaped-poverty-trap-yuen-yuen-ang

Is it strong institutions of good governance that leads to economic growth, or growth itself than enables good governance? My book, How China Escaped the Poverty Trap, tackles this long-standing, chicken-and-egg (endogenous) problem in development through a dynamic, complex systems approach. I argue that this chicken-and-egg debate is false because it incorrectly assumes that development is a linear process, wherein causality runs in only one direction. In fact, development is a coevolutionary (mutually causal) process that occurs in three reciprocal steps: harness existing weak institutions to build markets > emerging markets stimulate strong institutions > strong institutions preserve markets. I demonstrate this argument through the primary case of reform-era China, with extension to three secondary cases: late medieval Europe, antebellum United States, and contemporary Nigeria. This alternative sequential theory challenges deeply held assumptions that have long guided development theories and practices.