Douglass North

Douglass Cecil North (November 5, 1920 – November 23, 2015) was an American economist known for his work in economic history.

Douglass North was born in Cambridge, Massachusetts, on November 5, 1920.

He moved several times as a child due to his father's work at MetLife.

The family lived in Ottawa, Ontario, in Lausanne, Switzerland, in New York City, and in Wallingford, Connecticut.

North was educated at Ashbury College in Ottawa and the Choate School in Wallingford.

He was accepted at Harvard at the same time that his father became the head of MetLife on the West Coast, so North chose to attend the University of California, Berkeley.

During his time at Berkeley, North was a member of the Chi Phi Fraternity.

In 1942, he graduated with a B.A. degree in General Curriculum-Humanities.

Although his grades amounted to slightly better than a "C" average, he managed to complete a triple major in political science, philosophy and economics.

That same year, he entered the US Merchant Marine Academy, graduated a year later and went to sea for three years as a deck officer.

A conscientious objector in World War II, North became a navigator in the Merchant Marine, traveling between San Francisco and Australia.

During that time, he read economics and picked up his hobby of photography.

He taught navigation at the Maritime Service Officers' School in Alameda during the last year of the war, and struggled with the decision of whether to become a photographer or an economist.

From 1951 to 1956, North was an assistant professor of economics at the University of Washington, then from 1956 to 1960, an associate professor.

North returned to UC Berkeley, where he obtained a Ph.D. degree in economics in 1952.

He subsequently began his career as an assistant professor at the University of Washington.

In 1960, North became co-editor of the Journal of Economic History, popularizing cliometrics (New Economic History), and from 1960 to 1983, he was professor of economics at the University of Washington, where he also chaired the economics department from 1967 to 1979.

In 1979 he served as the Peterkin Professor of Political Economy at Rice University, and in 1981–82 as the Pitt Professor of American History and Institutions at Cambridge University, before joining the faculty of Washington University in St. Louis in 1983 as the Henry R. Luce Professor of Law and Liberty in the Department of Economics (where he also served as director of the center for Political Economy from 1984 to 1990).

He was the Bartlett Burnap Senior Fellow at the Hoover Institution at Stanford University.

In 1991, he became the first economic historian to win the John R. Commons Award, which was established by the International Honors Society for Economics in 1965.

A collection of North's papers is housed at the Rubenstein Library at Duke University.

In 1991 Douglass North published a paper, entitled 'Institutions,' in the Journal of Economic Perspectives.

This paper summarized much of his earlier research relating to economic and institutional change.

North defines institutions as "humanly devised constraints that structure political, economic and social interactions".

Constraints, as North describes, are devised as formal rules (constitutions, laws, property rights) and informal restraints (sanctions, taboos, customs, traditions, codes of conduct), which usually contribute to the perpetuation of order and safety within a market or society.

The degree to which they are effective is subject to varying circumstances, such as a government's limited coercive force, a lack of organized state, or the presence of strong religious precept.

Section 2 of North's 1991 paper describes the economic development of societies as occurring in stages:

North begins with local exchange within the village.

Along with Robert Fogel, he received the Nobel Memorial Prize in Economic Sciences in 1993.

In the words of the Nobel Committee, North and Fogel "renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change."

North was an influential figure in New Institutional Economics, which emphasizes the impact of institutions on economic behaviors and outcomes.

North argued, "Institutions provide the incentive structure of an economy; as that structure evolves, it shapes the direction of economic change towards growth, stagnation, or decline."

Rational and wealth-maximizing individuals lack complete information and have difficulties monitoring and enforcing agreements.

Institutions can provide information and reduce transaction costs, thus encouraging economic activity.

Along with Ronald Coase and Oliver Williamson, he helped found the International Society for the New Institutional Economics (ISNIE) which held its first meeting in St. Louis in 1997.

His research included property rights, transaction costs, the institutional basis of markets, and economic organization in history as well as economic development in developing countries.

North served as an expert for the Copenhagen Consensus and as an advisor to governments around the world.

He was engaged in research (with John J. Wallis of the University of Maryland and Barry Weingast of Stanford University) on how countries emerge from what they call "the natural state" and into long-run economic growth.

He was a trustee of the Economists for Peace and Security and a special adviser to the non-profit organization Vipani.

North died on November 23, 2015, at his summer home in Benzonia, Michigan from esophageal cancer at the age of 95.