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Institutions, Transaction Costs and Productivity in the Long Run


  • Douglass C. North

    (Washington University)


The argument of this essay is that the immense productivity increases resulting from technological developments of the past century and a half could only be realized by fundamental changes in the institutional and organizational structure--a supply side argument; and that the consequent tensions induced by the resulting societal transformation have resulted (and are continuing to result) in politically-induced fundamental changes in the institutional structure to mitigate these tensions--a demand side argument. Both the supply side and demand side institutional changes have been and continue to be fundamental influences on productivity change.

Suggested Citation

  • Douglass C. North, 1993. "Institutions, Transaction Costs and Productivity in the Long Run," Economic History 9309004, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpeh:9309004
    Note: 14 pages ascii text

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    Cited by:

    1. Ivan D. Trofimov, 2017. "Capital Productivity In Industrialised Economies: Evidence From Error-Correction Model And Lagrange Multiplier Tests," Economic Annals, Faculty of Economics, University of Belgrade, vol. 62(215), pages 53-80, October –.
    2. Malgorzata Szczepaniak & Agnieszka Szulc-Obloza, 2019. "Labour market institutions and income inequalities across the European Union," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 18(3), pages 365-377, September.
    3. Nikos Alabanos & Sotiris Theodoropoulos, 2016. "A key-point comparison & the new challenges for the existent Administrative Burden Models (A.B.M’s)," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 66(1-2), pages 32-45, January-J.
    4. Jorge Fernández-Baca, 1994. "Douglass North y la Nueva Historia Económica," Apuntes. Revista de ciencias sociales, Fondo Editorial, Universidad del Pacífico, vol. 21(34), pages 3-10.
    5. McAllister, Ryan R.J. & Smajgl, Alex & Asafu-Adjaye, John, 2007. "Forest logging and institutional thresholds in developing south-east Asian economies: A conceptual model," Forest Policy and Economics, Elsevier, vol. 9(8), pages 1079-1089, May.
    6. Janice Seinfeld, 1995. "Fuentes y componentes del crecimiento de la economía peruana, 1950-1990," Apuntes. Revista de ciencias sociales, Fondo Editorial, Universidad del Pacífico, vol. 22(37), pages 91-120.
    7. Baccini, Leonardo, 2014. "Cheap talk: transaction costs, quality of institutions, and trade agreements," LSE Research Online Documents on Economics 44923, London School of Economics and Political Science, LSE Library.

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    JEL classification:

    • N - Economic History


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