Kenneth Lee Sokoloff was an Americaneconomic historian who was broadly interested in the interaction between initial factor endowments, institutions, and economic growth. In particular, he examined the influence of factor endowments on economic development in the New World and the role of 19th century United States patent law in encouraging innovation.
In a series of influential papers coauthored with Stanley Engerman, Sokoloff studied the impact of countries' initial factor endowments on their later political and economic development. While much of the contemporary literature explained different growth rates across countries by appealing to differences in national culture or religion, Sokoloff used historical data to claim that much of the differential growth experiences of the US colonies and of New World countries can be explained through differences in initial endowments of factors including human capital and levels of inequality. Moreover, Sokoloff and Engerman theorized that initial levels of wealth and political power inequality led to the development of institutions that perpetuated these inequalities, furthering their deleterious impact on long run economic growth. In article "Institutions, Factors Endowments, and Paths of Development in the New World", Sokoloff and Engerman made the specific hypothesis about inequality in wealth, human capital, and political power that restrict development of economics and compose the United States and Canada have developed very different. For example, grains, which is grown on small family farms in the U.S. and Canada that lead the distributions of wealth more equal; whereas, other colonies in the New World relied on slaves for their labor force that lead to distributions of wealth, human capital and political power very unequal between black and white. In addition to wealth and political power inequality, they have also mentioned the inequality of schooling in Latin American countries. All of the Latin American countries had literacy requirement for voting. However, the government did not provide funds for public education that caused the Latin Americans to have a low literacy level, in which affected the voting rate. Therefore, a weak organizing schooling institution could affect the development of economy. Sokoloff and his coauthors also sought to understand the relationship between economic institutions and technological innovation. In particular, Sokoloff stressed the importance of US patent institutions in fostering innovation by entrepreneurs. For instance, with Zorina Khan, Sokoloff examined the careers of 160 "great inventors" credited with significant technological discoveries during the early American industrialization. In contrast to previous findings, Sokoloff and Khan found that these inventors were active entrepreneurs who responded systematically to market incentives. On the other hand, Sokoloff, with Naomi Lamoreaux, found that over time the capital requirements associated with invention became prohibitively high, leading to firms taking over much of the innovative activity that was previously undertaken by individual entrepreneurs.
