The Trajectory of Douglass North’s Institutionalist Economic Thought: an interpretation of theoretical and analytical mutations and aggregations

Abstract

This article proposes an analytical presentation of the systemic theoretical framework developed by Douglass North. Drawing on his seminal works from 1981, 1990, and 2005, we show how North incorporates heterodox theoretical and analytical categories into the orthodox foundations of economics in order to better explain the phenomena surrounding development. Beyond the categories present in the mainstream approach, he integrates into his explanatory framework more consistent variables such as allocative efficiency, procedural rationality, uncertainty, learning, path dependence, and belief, among others. Finally, North emphasizes the role of institutions as promoters of freedom—and, in turn, of economic change.