Institutional transformation and the origins of world income distribution This paper presents an attempt to quantify institutional changes and examine the respec- tive effects of de jure and de facto political institutions on the path of long-run economic growth and development for a large panel of countries in the period 1810–20 0 0. Using fac- tor analysis, latent indices of de jure and de facto political institutions are constructed by exploiting several existing institutional datasets. The empirical evidence consistently sug- gests that societies with more extractive political institutions in Latin America, South Asia, Middle East and Eastern Europe have achieved systematically slower long-run economic growth and failed to catch-up with the West. The evidence confirms the primacy of de facto institutional differences over de jure institutions in causing differential growth and development outcomes over time. It also explains why highly concentrated political power and extractive political regimes inhibited the path of economic growth by setting persis- tent barriers to the engagement in collective action. In the long run, institutional differ- ences account for up to two thirds of within-country development path and up to 83% of between-country development gaps. Journal of Comparative Economics 44 (4) (2016) 936–960. Department of Economic and Social History, Utrecht University, Drift 6, NL-3512 BS Utrecht, The Netherlands.