A Conceptual Framework for Interpreting Recorded Human History

80 Pages Posted: 24 Dec 2006 Last revised: 27 Jul 2007

See all articles by Douglass C. North

Douglass C. North

Washington University in St. Louis - Department of Economics

John Joseph Wallis

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

Barry R. Weingast

Stanford University, Department of Political Science

Date Written: December 2006

Abstract

Neither economics nor political science can explain the process of modern social development. The fact that developed societies always have developed economies and developed polities suggests that the connection between economics and politics must be a fundamental part of the development process. This paper develops an integrated theory of economics and politics. We show how, beginning 10,000 years ago, limited access social orders developed that were able to control violence, provide order, and allow greater production through specialization and exchange. Limited access orders provide order by using the political system to limit economic entry to create rents, and then using the rents to stabilize the political system and limit violence. We call this type of political economy arrangement a natural state. It appears to be the natural way that human societies are organized, even in most of the contemporary world. In contrast, a handful of developed societies have developed open access social orders. In these societies, open access and entry into economic and political organizations sustains economic and political competition. Social order is sustained by competition rather than rent-creation. The key to understanding modern social development is understanding the transition from limited to open access social orders, which only a handful of countries have managed since WWII.

Suggested Citation

North, Douglass C. and Wallis, John J. and Weingast, Barry R., A Conceptual Framework for Interpreting Recorded Human History (December 2006). NBER Working Paper No. w12795. Available at SSRN: https://ssrn.com/abstract=953360

Douglass C. North (Contact Author)

Washington University in St. Louis - Department of Economics ( email )

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John J. Wallis

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3552 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Barry R. Weingast

Stanford University, Department of Political Science ( email )

Stanford, CA 94305-6010
United States
650-723-0497 (Phone)
650-723-1808 (Fax)

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