Economic progress is more than a matter of markets and technological innovation. As an economy's structure changes, government policies must change as well, or economic development will be stunted.
Consider the British agricultural revolution before 1800, which was an essential prerequisite for the industrial revolution that followed. The enclosure movement extinguished common rights to land and allowed landowners (at the cost of great suffering, to be sure) to experiment with new, more productive techniques. Had institutions and laws not changed, that particular economic transformation would have not happened.
Or look at the US at the 19th century's end--«the furnace where the future was being forged,» as Leon Trotsky called it. Mass production, large corporations, a continent_wide market, and electric power could not come to pass without institutional and legal changes that underlay the economic transformation. Federal preemption of state law forged the country into a single market. Without a new legal regime, limited-liability companies (necessary to raise capital for large undertakings) could not exist. Antitrust laws made certain that the enormous economies of scale of the large corporation were not achieved at the price of eliminating competition.
It did not have to happen this way. In Europe there was no continental market because of national tariffs, and fewer economies of scale were attained. In Germany, with no antitrust policy, there was no brake on the cartelization of industry, which made the average German poorer and the distribution of wealth more skewed.