Skip to main content
×
Home

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

  • AVNER GREIF (a1) and JOEL MOKYR (a2)
Abstract
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.

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle.

      Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      Cognitive rules, institutions, and economic growth: Douglass North and beyond
      Available formats
      ×
      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Dropbox account. Find out more about sending content to Dropbox.

      Cognitive rules, institutions, and economic growth: Douglass North and beyond
      Available formats
      ×
      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Google Drive account. Find out more about sending content to Google Drive.

      Cognitive rules, institutions, and economic growth: Douglass North and beyond
      Available formats
      ×
Copyright
Corresponding author
*Email: avner@stanford.edu
**Email: j-mokyr@northwestern.edu
References
Hide All
Acemoglu D. and Robinson J. (2012), Why Nations Fail: The Origins of Power, Prosperity, and Poverty, New York: Crown.
Aoki M. (2001), Toward a Comparative Institutional Analysis, Cambridge, MA: MIT Press.
Barzel Y. and Kiser E. (1997), ‘The Development and Decline of Medieval Voting Institutions: A Comparison of England and France’, Economic Inquiry, 35 (2): 244260.
Becker C. L. (1932), The Heavenly City of the Eighteenth-Century Philosophers, New Haven, CT and London: Yale University Press.
Berkowitz D. and Clay K. (2011), The Evolution of a Nation: How Geography and Law Shaped the American States, Princeton: Princeton University Press.
Bisson T. N. (1966), ‘The Military Origins of Medieval Representation’, American Historical Review, 71 (4): 11991218.
Coase R. (1974), ‘The Market for Goods and the Market for Ideas’, American Economic Review, 64 (2): 384391.
Colley L. (1992), Britons: Forging the Nation, 1707-1837, New Haven, CT: Yale University Press.
Denzau A. T. and North D. C. (1994), ‘Shared Mental Models: Ideologies and Institutions’, Kyklos, 47 (1): 331.
Durham W. H. (1991), Coevolution: Genes, Culture, and Human Diversity, Stanford: Stanford University Press.
Gans J. S. and Stern S. (2003), ‘The Product Market and the “Market for Ideas”: Commercialization Strategies for Technology Entrepreneurs’, Research Policy, 32 (2): 333350.
Glaeser E. L. and Shleifer A. (2002), ‘Legal Origins’, Quarterly Journal of Economics, 117 (4): 11931230.
Graves Michael A. R. (2001), The Parliaments of Early Modern Europe, Harlow, England: Pearson Education Ltd.
Greif A. (1998), ‘Historical and Comparative Institutional Analysis’, American Economic Review, 88 (2): 8084.
Greif A. (2006), Institutions and the Path to the Modern Economy: Lessons from Medieval Trade, Cambridge: Cambridge University Press.
Greif A. (2014), ‘Do Institutions Evolve?’, Journal of Bioeconomics. A Special Issue Honoring Elinor Ostrom, 16 (16): 5360.
Greif A. and Kingston C. (2011), ‘Institutions: Rules or Equilibria?’, in Caballero G. and Schofield N. (eds.), Political Economy of Institutions, Democracy and Voting. Heidelberg: Springer, pp. 1344.
Greif A. and Iygun M. (2013), ‘Social Organizations, Violence, and Modern Growth’, American Economic Review (Papers & Proceedings), 103 (3): 534538.
Greif A. and Rubin J. (2016), ‘Political Legitimacy and the Transition to the Rule Law: The English Experience’, Working paper, Stanford University.
Greif A. and Tabellini G. (2010), ‘Cultural and Institutional Bifurcation: China and Europe Compared’, American Economic Review, 100 (2): 135140.
Greif A. and Tabellini G. (2016), ‘The Clan and the City: Sustaining Cooperation in China and Europe’, Journal of Comparative Economics (forthcoming).
Greif A. and Tadelis S. (2010), ‘A Theory of Moral Persistence: Crypto-morality and Political Legitimacy’, Journal of Comparative Economics, 38 (3): 229244.
Harling P. (1995), ‘Rethinking ‘Old Corruption’, Past and Present, 147 (1): 127158.
Harling P. (1996), The Waning of ‘Old Corruption’: The Politics of Economical Reform in Britain, 1779-1846, Oxford: Clarendon Press.
Harris R. (2016), The Birth of the Business Corporation East and West: The Organization of Eurasian Trade 1400-1700, Princeton: Princeton University Press.
Hayek F. A. (1942), ‘Scientism and the Study of Society. Part I’, Economica, 9 (35): 267291.
Herb M. (2003), ‘Taxation and Representation’, Studies in Comparative International Development, 38 (3): 331.
Hodgson G. (2006), ‘What are Institutions?’, Journal of Economic Issues, 40 (1): 125.
Hodgson G. (2015), Conceptualizing Capitalism: Institutions, Evolution, Future, Chicago: University of Chicago Press.
Hoffman P. T. and Norberg K. (2001), Fiscal Crises, Liberty, and Representative Government 1450-1789, Stanford: Stanford University Press.
Hudson R. P. (1983), Disease and Its Control: the Shaping of Modern Thought, Westport: Greenwood Press.
Iyigun M. (2015), War, Peace, and Prosperity in the Name of God: The Ottoman Role in Europe's Socioeconomic Evolution, Chicago: University of Chicago Press.
Jacob M. C. (2007), ‘Mechanical Science of the Factory Floor’, History of Science, 45 (2): 197221, Art. no. 148.
Jacob M. C. (2014), The First Knowledge Economy, Cambridge: Cambridge University Press.
Kalai E. and Lehrer E. (1993a), ‘Rational Learning Leads to Nash Equilibrium’, Econometrica, 61 (5): 10191045.
Kalai E. and Lehrer E. (1993b), ‘Subjective Equilibrium in Repeated Games’, Econometrica, 61 (6): 12311240.
Kuran T. (2011), The Long Divergence: How Islamic Law Held Back the Middle East, Princeton: Princeton University Press.
La Porta R., Lopez-de-Silanes F., and Shleifer A. (2008), ‘The Economic Consequences of Legal Origins’, Journal of Economic Literature, 46 (2): 285332.
Lecoq A.-M. (ed.) (2001), La Querelle des Anciens et des Modernes, Paris: Éditions Gallimard.
Levi M. and Sacks A. (2009), ‘Legitimating Beliefs: Concepts and Measurements’, Regulation and Governance, 3 (3): 331333.
Levine J. M. (1981), ‘Ancients and Moderns Reconsidered’, Eighteenth-Century Studies, 15 (1): 7289.
Levine J. M. (1991), The Battle of the Books: History and Literature in the Augustan Age, Ithaca, NY: Cornell University Press.
McCloskey Deirdre N. (2006), The Bourgeois Virtues: Ethics for an Age of Commerce, Chicago: University of Chicago Press.
McCloskey D. N. (2016), Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World, Chicago: University of Chicago Press.
Mokyr J. (2007), ‘The Market for Ideas and the Origins of Economic Growth in Eighteenth Century Europe’, Tijdschrift voor Sociale en Economische Geschiedenis, 4 (1): 338 (Heineken Lecture).
Mokyr J. (2009), The Enlightened Economy, New York and London: Yale University Press
Mokyr J. (2016), A Culture of Growth: The Origins of the Modern Economy, Princeton: Princeton University Press.
Morris Ian (2010), Why the West Rules—For Now, New York: Farrar, Strauss and Giroux.
Myers A. R. (1975), Parliament and Estates in Europe to 1789, London: Harcourt Brace Jovanovich.
Nachbar J. H. (1997), ‘Prediction, Optimization, and Learning in Repeated Games’, Econometrica, 65 (2): 275310.
Nachbar J. H. (2005), ‘Beliefs in Repeated Games’, Econometrica, 73 (2): 459480.
North D. C. (1981), Structure and Change in Economic History, New York: W. W. Norton.
North D. C. (1990), Institutions, Institutional Change, and Economic Performance, Cambridge: Cambridge University Press.
North D. C. (2005), Understanding the Process of Economic Change, Princeton, NJ: Princeton University Press.
North D. C., Wallis J. J. and Weingast B. (2009), Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History, Cambridge: Cambridge University Press.
Olson Mancur (1965), The Logic of Collective Action; Public Goods and the Theory of Groups, Cambridge, MA: Harvard University Press.
Pincus S. (2011), 1688: The First Modern Revolution, New Haven: Yale University Press.
Pinker S. (2011), The Better Angels of Our Nature, New York: Penguin.
Polanyi M. (1962), ‘The Republic of Science: Its Political and Economic Theory’, Minerva, 1 (1): 5473.
Richerson P. J. and Christiansen M. H. (eds.) (2013), Cultural Evolution: Society, Technology, Language, and Religion, Cambridge, MA: MIT Press.
Roland G. (2004), ‘Understanding Institutional Change: Fast-Moving and Slow-Moving Institutions’, Studies in Comparative International Development, 38 (4): 109131.
Rossi Paolo (1970), Philosophy, Technology and the Arts in the Early Modern Era, New York: Harper Torchbooks.
Scott W. R. (1998), Organizations. Rational, Natural and Open Systems, New Jersey: Prentice Hall.
Stigler G. J. (1965), ‘The Intellectual and the Marketplace’, Kansas Journal of Sociology, 1 (2): 6977.
Stigler S. J. (1999), Statistics on the Table: The History of Statistical Concepts and Methods, Cambridge, MA: Harvard University Press.
Troost W. (2001), Stadhouder-koning Willem III: Een Politieke Biografie, Hilversum: Uitgeverij Verloren.
Van Zanden J. L., Buringh E., and Bosker M. (2012), ‘The Rise and Decline of European Parliaments, 1188-1789’, The Economic History Review, 65 (3): 835862.
Wootton D. (2015), The Invention of Science: A New History of the Scientific Revolution, London: Allen Lane.
Zagorin P. (1998), Francis Bacon, Princeton, NJ: Princeton University Press.
Zittel C., Engel G., Nanni R., and Karafyllis N. C. (eds.) (2008), Philosophies of Technologies: Francis Bacon and His Contemporaries, Leiden and Boston: Brill.
Zhao D. (2009), ‘The Mandate of Heaven and Performance Legitimation in Historical and Contemporary China’, The American Behavioral Scientist, 53 (3): 416443.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Institutional Economics
  • ISSN: 1744-1374
  • EISSN: 1744-1382
  • URL: /core/journals/journal-of-institutional-economics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 20
Total number of PDF views: 370 *
Loading metrics...

Abstract views

Total abstract views: 1799 *
Loading metrics...

* Views captured on Cambridge Core between 22nd November 2016 - 18th November 2017. This data will be updated every 24 hours.