... But even if you have strong institutions you will not grow without capital.
Correct, & I have never said otherwise. But as Ragnar Nurkse wrote, 'capital is a necessary but
not a sufficient condition of progress'. The latter is the part you seem to have trouble with.
You can grow without good institutions and highly specialized human capital but you cannot grow without investment. You may never grow to conditional convergence but you will grow.
Not so. Forget models for a while & study real world examples. You will find that there are cases where investment (e.g. a large part of the old Soviet food-processing industry) can destroy value. The raw materials were worth more than the output. If that investment had not been made, & the raw materials had been sold unprocessed, the economy would have been larger. The world is full of cases of investment which has failed to produce growth, in which the goods & effort invested have produced as much growth as a man digging a trench while someone else fills it in behind him. Foreign aid is responsible for some of the most egregious examples, e.g. the infamous groundnut scheme, or the massive CIDA-funded bakery in Dar-es-Salaam. Occasionally, a whole (usually centrally-planned) economy functions on that level for a while.
If you invest
productively you will grow. For investment to be productive requires the right conditions, & the right decisions. Wrong institutions, wrong incentives, & wrong decisions will be made, as in the above examples.
When young, & still studying, there is a tendency, easy to fall prey to, to be very enthusiastic about what one has most recently learned. One can become carried away with it. It seems to explain everything, to be . .
right. Twenty five years later, having watched things one learned as the latest, cutting-edge ideas having been modified, perhaps completely replaced, & having tested them against the real world & found that they need a bit of bashing & bodging into something less elegant to make them work, one tends to be rather less easily enthused with theories, & tend more towards pragmatic solutions.
I'm put in mind of the communists I knew when I was a teenager. They were so sure . . .
I think it's past time to call this discussion to a halt. We're a long way off topic, & we've more or less beaten it to death.