How to make an economy more complex? The determinants of complexity in historical perspective

A higher level of per capita income is associated with a better diversified and more complex export basket. Moreover, a number of results indicate that this relationship might be causal. However, what affects the level of economic complexity itself is yet to be established. In this paper, we focus on a small list of potential determinants of economic complexity. We show that a higher level of complexity is associated with a higher level of human capital accumulation. It is also linked to the initial level of complexity through an inverse U-shaped relationship. These findings survive a number of key robustness checks.