DEFINITION of Douglass C. North
Douglass C. North (1920-2015) was an American economist and winner of the 1993 Nobel Memorial Prize in Economics, along with Robert William Fogel, for his application of economic theory and quantitative methods to economic history. His research focused on how institutions affect economic development.
BREAKING DOWN Douglass C. North
Born in 1920 in Massachusetts, Douglass North earned his bachelor's degree and Ph.D. from the University of California at Berkeley. Dr. North's positions included work as a senior fellow with Stanford University's free-market think tank, the Hoover Institution. Prior to becoming an economist, he served as a navigator in the Merchant Marines. Dr. North taught economics and history at Washington University in St. Louis and the University of Washington at Seattle.
In his autobiographical sketch on the official website of the Nobel Prize, the economist implicitly credits the zeitgeist of Berkeley as the reason for the "clear intention that what I wanted to do with my life was to improve societies, and the way to do that was to find out what made economies work the way they did or fail to work." This led him along the path to deep study of the role of institutions in economic performance of a nation. His first major work, The Economic Growth of the United States from 1790 to 1860, was grounded in neo-classical economic theory, but a nagging feeling that there were shortcomings in underlying assumptions in this school of thought prompted more intensified research. "It was not possible to explain long-run poor economic performance in a neo-classical framework," North concluded. In a major follow-up work, Structure and Change in Economic History, published in 1981, the economic historian dropped the neo-classical assumption that institutions were efficient.
Dr. North spent the next three decades studying economic history based on this revised notion of inherent inefficiencies of political institutions. For this contribution he shared the 1993 Nobel Prize in Economics.