Douglass North pioneered the field of Cliometrics, the
application of modern statistical and economic models to interpret historical
events. North’s research examines the role of property rights, contracts and
transactions costs in affecting economic growth and well-being. He has shown that history is the sum of human actions within various “rules of the game” human
beings inherit and design.
The Nobel Committee recognized Professor North jointly with
Robert W. Fogel “for having renewed research in economic history by applying
economic theory and quantitative methods in order to explain economic and
institutional change.”
Quotes from Douglass North’s October 1994 lecture at
I knew where I was going
from the day I decided to become an economist.
I set out to understand what made economies rich or poor because I
viewed that objective as being the essential prerequisite to improving their
performance. The search for the Holy grail of the ultimate source of economic performance has
taken me on a long and certainly unanticipated journey, from Marxism to
cognitive science, but it has been this persistent objective which has directed
and shaped my scholarly career.
What we needed was a
theoretical structure that we could use to explain and analyze economic
history. The old institutional economics, because it failed
to provide such a theoretical framework, never posed a serious alternative to
neoclassical theory. Marxism was
explicitly concerned with institutions, asked good questions, and had an
explanation of long-run change, but there were too many flaws in the
model. The strengths of neoclassical
theory were its uncompromising focus on scarcity and, hence, competition as the
key to economics, its use of the individual as the unit of analysis, and the
power of the economic way of reasoning.
There had to be a way of melding the strengths of these diverse
approaches into a theoretical structure.
That is what I and others have set out to do in the new institutional
economics.
Additional resources on Douglass North are available at the Nobel web
site.