Douglass North

The Natural State or why effective economic reform is so difficult

Friday, 18 August 2006
10:45 - 11:30 hrs CEST

Abstract

We know a great deal about the sources of economic development but we do not know how to achieve it. The reason is that the theory we have is deficient. In this essay I advance a new approach to the study of economic change and development. The political and economic social order that tends to evolve--the natural state--is consistent with out genetic heritage and the self interest of the elites that tend to evolve over time but does not produce sustained economic growth. Moreover, it is extremely difficult to change and create the open-access social order which is the source of modern economic growth. This essay explores the characteristics of the natural state, the open-access social order, and the nature of the transition from one to the other.

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