Douglass North Quotes

8 Sourced Quotes

We are far from understanding how to achieve adaptively efficient economies because allocative efficiency and adaptive efficiency may not always be consistent. Allocatively efficient rules would make today's firms and decisions secure - but frequently at the expense of the creative destruction process that Schumpeter had in mind.

Douglass North
International specialization and division of labor requires institutions and organizations to safeguard property rights across international boundaries so that capital markets as well as other kinds of exchange can take place with credible commitment on the part of the players.

Douglass North
Information costs are reduced by the existence of large numbers of buyers and sellers. Under these conditions, prices embody the same information that would require large search costs by individual buyers and sellers in the absence of an organized market.

Douglass North
Order in the societies they describe is the result of a dense social network where people have an intimate understanding of each other and the threat of violence is a continuous force for preserving order because of its implications for other members of society.

Douglass North
Effective institutions raise the benefits of cooperative solutions or the costs of defection, to use game theoretic terms.

Douglass North
Economists have the correct insight that economics is a theory of choice, the key to the story is the variety of options and centralised political control limits the options. The best recipe is adaptive efficiency coping with novel uncertainty in a non-ergodic world, the maintenance of institutions which enable trial & error experiment to occur, and an effective means of eliminating unsuccessful solutions

Douglass North
Specialization in this world is rudimentary and self-sufficiency characterizes most individual households

Douglass North
Institutions are the humanly devised constraints that structure political, economic, and social interactions. They consist of both informal constraints (sanctions, taboos, customs, tradition, and code of conduct) and formal rules (constitutions, laws, property rights).

Douglass North