Understanding the Process of Economic Change (The Princeton Economic History of the Western World)

In this landmark work, a Nobel Prize-winning economist develops a new way of understanding the process by which economies change. Douglass North inspired a revolution in economic history a generation ago by demonstrating that economic performance is determined largely by the kind and quality of institutions that support markets. As he showed in two now classic books that inspired the New Institutional Economics (today a subfield of economics), property rights and transaction costs are fundamental determinants. Here, North explains how different societies arrive at the institutional infrastructure that greatly determines their economic trajectories. North argues that economic change depends largely on "adaptive efficiency," a society's effectiveness in creating institutions that are productive, stable, fair, and broadly accepted--and, importantly, flexible enough to be changed or replaced in response to political and economic feedback. While adhering to his earlier definition of institutions as the formal and informal rules that constrain human economic behavior, he extends his analysis to explore the deeper determinants of how these rules evolve and how economies change. Drawing on recent work by psychologists, he identifies intentionality as the crucial variable and proceeds to demonstrate how intentionality emerges as the product of social learning and how it then shapes the economy's institutional foundations and thus its capacity to adapt to changing circumstances. __Understanding the Process of Economic Change__ accounts not only for past institutional change but also for the diverse performance of present-day economies. This major work is therefore also an essential guide to improving the performance of developing countries. In This Landmark Work, A Nobel-prize-winning Economist Develops A New Way Of Understanding The Process By Which Economies Change. Douglass North Inspired A Revolution In Economic History A Generation Ago By Demonstrating That Economic Performance Is Determined Largely By The Kind And Quality Of Institutions That Support Markets. As He Showed In Two Now Classic Books That Inspired The New Institutional Economics (today A Subfield Of Economics), Property Rights And Transaction Costs Are Fundamental Determinants. Here, North Explains How Different Societies Arrive At The Institutional Infrastructure That Greatly Determines Their Economic Trajectories. Understanding The Process Of Economic Change Accounts Not Only For Past Institutional Change But Also For The Diverse Performance Of Present-day Economies. This Major Work Is Therefore Also An Essential Guide To Improving The Performance Of Developing Countries.--jacket. An Outline Of The Process Of Economic Change -- The Issues Involved In Understanding Economic Change -- Uncertainty In A Non-ergodic World -- Belief Systems, Culture, And Cognitive Science -- Consciousness And Human Intentionality -- The Scaffolds Humans Erect -- Taking Stock -- The Road Ahead -- The Evolving Human Environment -- The Sources Of Order And Disorder -- Getting It Right And Getting It Wrong -- The Rise Of The Western World -- The Rise And Fall Of The Soviet Union -- Improving Economic Performance -- Where Are We Going? Douglass C. North. Includes Bibliographical References (p. 171-181) And Index. In this landmark work, a Nobel Prize - winning economist develops a new way of understanding the process by which economies change. Douglass North inspired a revolution in economic history a generation ago by demonstrating that economic performance is determined largely by the kind and quality of institutions that support markets. As he showed in two now classic books that inspired the New Institutional Economics (today a subfield of economics), property rights and transaction costs are fundamental determinants. Here, North explains how different societies arrive at the institutional infrastructure that greatly determines their economic trajectories. North argues that economic change depends largely on "adaptive efficiency," a society's effectiveness in creating institutions that are productive, stable, fair, and broadly accepted - and, importantly, flexible enough to be changed or replaced in response to political and economic feedback. While adhering to his earlier definition of institutions as the formal and informal rules that constrain human economic behavior, he extends his analysis to explore the deeper determinants of how these rules evolve and how economies change