From property rights and institutions, to beliefs and social orders: revisiting Douglass North’s approach to development

Douglass North is a uniquely creative and inspiring social scientist. The impact of North’s ideas in the area development cooperation can hardly be overstated. By stressing the role of institutions, this scholar has immensely influenced development thinking and practice, providing intellectual underpinnings to the dominant good governance paradigm. North’s landmark Institutions, Institutional Change and Economic Performance is one of the most cited books in the social sciences. This paper contends, however, that North’s ideas are widely cited, but not always properly understood. Moreover, some of his core arguments have been overlooked, ignored, or misrepresented, not least by the aid community. This paper provides a systematic assessment of the content and evolution of North’s writings, from his pioneering works on property rights and institutions in the 1970s, to his recent scholarship on beliefs and political violence. The focus is on identifying the key analytical problems and remaining challenges of the institutional approach to development. The paper also takes issue with the inconsistencies and policy gaps of the good governance consensus. In doing so, it also reflects upon the future of the research program on institutions and development. Would the renewed emphasis on politics, conflict, inequality, and context lead to an improved governance agenda or to a shift towards a post-institutionalist paradigm?