North 's Theory And Change Essay

1880 Words Jan 27th, 2015 null Page
The following critique essay aims to critically engage with Douglass North’s Structure and Change in Economic History through an examination of North’s theoretical propositions and an analysis of his application of these theoretical foundations to various historical periods of rapid economic transformation. Specifically, the first section will pull out North’s primary theoretical assertions and assess their merits relative to their primary theoretical rivals. The second section will examine two of North’s attempts to apply his theory of economic change to empirical cases.
Theory: An Overview and Response to North’s Theoretical Claims
North seeks to establish a theory capable of explaining structural economic change. By “structure,” North is referring to those aspects of a society that determine economic performance such as technology, population, institutions, and ideology (North 3). North’s theory can be understood as an addition to the neoclassical model of an economy. Somewhat paradoxically, North justifies the use of the neoclassical approach as his starting point by citing its strong – and often violated – assumptions regarding the perfect flow of resources and information amongst economic actors. That is, because the neoclassical approach is explicit in assuming the absence of institutions, it offers an intriguing way for North to build on existing theory by including a factor he deems critical to understanding long term structural changes: institutions. That is,…

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