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Cognitive rules, institutions, and economic growth: Douglass North and beyond

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  • GREIF, AVNER
  • MOKYR, JOEL

Abstract

Douglass North's writing on institutional change recognized from the very start that such change depends on cognition and beliefs. Yet, although he focused on individual beliefs, we argue in this paper that such beliefs are social constructs. We suggest that institutions – rules, expectations, and norms – are based on shared cognitive rules. Cognitive rules are social constructs that convey information that distills and summarizes society's beliefs and experience. These rules have to be self-enforcing and self-confirming, but they do not have to be ‘correct’. We describe the characteristics of such rules in the context of a market for ideas, and illustrate their importance in two developments central to the growth of modern economies: the rise of the modern state with its legitimacy based on consent, and the rise of modern science-based technology that was the product of the scientific revolution and the Enlightenment.

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  • Greif, Avner & Mokyr, Joel, 2017. "Cognitive rules, institutions, and economic growth: Douglass North and beyond," Journal of Institutional Economics, Cambridge University Press, vol. 13(1), pages 25-52, March.
    • Handle: RePEc:cup:jinsec:v:13:y:2017:i:01:p:25-52_00
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    Cited by:

    1. Willemien Kets & Alvaro Sandroni, 2021. "A Theory of Strategic Uncertainty and Cultural Diversity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(1), pages 287-333.
    2. Dieter Bögenhold, 2020. "History of Economic Thought as an Analytic Tool: why Past Intellectual Ideas Must Be Acknowledged as Lighthouses for the Future," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 26(1), pages 73-87, February.
    3. Karaja, Elira & Rubin, Jared, 2022. "Θ The cultural transmission of trust norms: Evidence from a lab in the field on a natural experiment," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 1-19.
    4. Christopher J. Boudreaux & Daniel L. Bennett & David S. Lucas & Boris N. Nikolaev, 2023. "Taking mental models seriously: institutions, entrepreneurship, and the mediating role of socio-cognitive traits," Small Business Economics, Springer, vol. 61(2), pages 465-493, August.
    5. Raoul Beunen & Kristof Van Assche & Monica Gruezmacher, 2022. "Evolutionary Perspectives on Environmental Governance: Strategy and the Co-Construction of Governance, Community, and Environment," Sustainability, MDPI, vol. 14(16), pages 1-18, August.
    6. Amendolagine, Vito & von Jacobi, Nadia, 2023. "Symbiotic relationships among formal and informal institutions: Comparing five Brazilian cultural ecosystems," Economic Systems, Elsevier, vol. 47(3).
    7. Chenxi Zhou & Kent Ngan-Cheung Hui & Kevin Zheng Zhou & Yuanyuan Gong, 2023. "Is failure the mother of success? Prior failure experience and cross-border M&A completion by emerging market firms," Asia Pacific Journal of Management, Springer, vol. 40(2), pages 775-813, June.
    8. Samuel Kwaku Agyei & Godwin Adolf Idan, 2022. "Trade Openness, Institutions, and Inclusive Growth in Sub-Saharan Africa," SAGE Open, , vol. 12(2), pages 21582440221, May.
    9. Gabriela Przeslawska, 2019. "Significance of uncertainty in explaining institutional change in Douglass C. North’s approach," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 18(3), pages 331-346, September.
    10. Liu, Feifei & He, Xinming & Wang, Tao, 2023. "In the name of the family: The effect of CEO clan culture background on firm internationalization," Journal of Business Research, Elsevier, vol. 161(C).
    11. Izabela Ostoj, 2019. "On the validity of the division into formal and informal institutions," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 18(1), pages 61-72, March.
    12. Frolov, Daniil, 2019. "The manifesto of post-institutionalism: institutional complexity research agenda," MPRA Paper 97662, University Library of Munich, Germany.
    13. Yang Zhou, 2022. "Economic institutions and horizontal checks and balances in the Chinese bureaucratic system: evidence at the prefecture-city level," Economics of Governance, Springer, vol. 23(2), pages 133-160, June.
    14. Hoff,Karla & Jalan,Jyotsna & Santra,Sattwik, 2021. "Participatory Theater Empowers Women : Evidence from India," Policy Research Working Paper Series 9680, The World Bank.
    15. Frolov, Daniil, 2019. "Постинституционализм: Программа Исследований За Пределами Институционального Мейнстрима [Post-institutionalism: research program beyond the institutional mainstream]," MPRA Paper 92328, University Library of Munich, Germany.

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