Robert Fogel and Douglass North
Citation: For having renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change.
The key idea
Quantitative economic history. North: institutions — formal rules, informal norms, enforcement — determine long-run economic performance. Fogel: railroad cliometrics; the US economy without railroads would have been only 3% smaller in 1890.
The explanation
North's institutional economics argued that property rights, contract enforcement, and the rule of law are the binding constraints on long-run growth. Fogel's cliometric revolution applied quantitative methods to historical questions, finding many 'transformative' technologies (railroads, slavery as economic system) had smaller economic effects than narrative history suggested.
Why Africa should care
North's institutional framework is the intellectual ancestor of Acemoglu-Robinson-Johnson (2024 prize). It is the explicit framework behind the African Development Bank's governance scoring, the Ibrahim Index, and most multilateral conditionality. The single best predictor of growth divergence between Botswana and the DRC, both resource-rich, is institutional quality in North's sense.
How to use it
Before crediting a policy reform with a growth surge, check whether institutional quality (property rights, contract enforcement, the rule of law) moved in tandem. Without that, the growth is usually transitory.
Canonical works
- Douglass C. North (1990) "Institutions, Institutional Change and Economic Performance" Cambridge University Press
- Robert W. Fogel (1964) "Railroads and American Economic Growth" Johns Hopkins University Press
More from Information, finance, and development · 1990-1999
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