Governments don't need to prove Marx and Engels wrong any more than they need to prove Hitler and Mussolini wrong. They do need to stop doing stupid stuff. The problem with Itskhoki & Moll type papers is that reality works differently. In some locations, Capitalists need to make profits so as to exit. Workers who gain work skills also exit. The 'Gravity model' prevails unless, by some exogenous or inspired intervention, exactly the right growth path is hit upon thanks to adventitious external economies



The sad truth is some people should be getting out of some locations. Blood in the streets is a sign you should not ignore. As for taxes- all that matters is cost of collection and deadweight loss. Why pretend this is a story about growth? Investment allowances could take care of that.



One final point- some Societies are shittier than others either because the Government or the People or both are shittier than others. Unrest there is merely a reminder that you need to be looking for greener pastures.