This article explores the origins of divergent technological pathways in the early modern world, and the role that artisanal knowledge played in this process. It rejects older explanations based on societal differences in entrepreneurial propensities and incentives, and a more modern one based on factor cost. It argues instead for the importance of conditions that facilitated transactions between complementary skills. In India, the institutional setting within which artisan techniques were learned had made such transactions less likely than in eighteenth-century Europe. The cost of acquiring knowledge, therefore, was relatively high in India.
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