New Economist Blog recommends

"The Origins of Western Economic Success:Commerce, Finance, and Government in Pre-Industrial Europe" by Meir Kohn:
"This is a detailed and fascinating work, written in a clear prose. I look forward to its publication and the ensuing debate."
Most of the draft is available at http://www.dartmouth.edu/~mkohn/
From the first chapter:
"Why does one economy do better than another? What is holding back the less developed
countries from catching up with the more developed? What problems do the former communist economies face in their transition to a market system? And perhaps the most basic question: What are the origins of the economic success of the West? Our answer to these questions depends on our understanding of the process of economic
growth. Only with a sound understanding of this process can we hope to formulate
economic policies that promote economic progress and, perhaps more important, avoid
economic policies that hinder it.
Modern economics offers an explanation of economic growth that has its origins in
the work of Ricardo and Malthus.1 This ‘Ricardian’ theory sees the potential output of an economy as being determined by the resources and technology available. At any time, producers exploit this potential to the full: there is no slack. Consequently, for output to grow, the economy needs either more resources or better technology. With no change in technology, output per worker—and so income per capita—can grow only if each worker uses more capital or more land. If more capital or more land is not available, then total output can still grow if population and so the number of workers increases. However, in these circumstances, total output will grow by decreasing amounts—the law of diminishing returns. As a result, as population grows, average output and so income per capita will fall. Malthus saw in this a mechanism that would constrain the growth of population: falling income would raise mortality and so keep population in check. The great hope of escaping this 'Malthusian trap' is technology: better technology can increase output per worker even without additional resources. Consequently, technological progress becomes for the Ricardian theory the key to long-run economic growth. Despite its pivotal importance, however, the theory offers no economic explanation of what determines the rate of technological progress. Rather, it emphasizes non-economic factors: culture—the degree of mechanical and scientific curiosity—and politics—the extent of government support or opposition.
.....
The can-opener in the Ricardian theory of economic growth is the market. The market is simply taken for granted: it plays no explicit role in the Ricardian theory. But in the real world, markets cannot be taken for granted. Contrary to the Ricardian view, it is not technological progress but rather the creation and expansion of markets that drives economic growth. Technological progress is a consequence, not a cause. It is a lack of well-functioning markets—not a lack of resources or of technology—that explains the stagnation of the less-developed world and the problems of the transition economies. The economic success of the West is explained, not by its cultural superiority or by the wisdom of its governments, but by its greater success in developing markets. Of course, the obvious question is, Why do markets develop more successfully in one place rather than in another? Answering that question is a primary goal of this book."