Synopsis
North's framework arguing that institutions, the rules and norms shaping incentives, are the deep cause of economic growth or stagnation.
Core passage idea
Paraphrase · Modern copyrighted workInstitutions are the humanly devised rules of the game, and it is these constraints, far more than resources, that determine whether economies thrive.
It shifts the explanation of prosperity from factors of production to the incentive structures that institutions create.
To avoid a bubble
Pair with The Great Transformation.
Reading note
Read it as a concise theoretical framework, attentive to the distinction between formal rules and informal norms.
Best paired with
The Great Transformation