While their research centres mainly on issues relating to developed market economies, some of them have devoted their attention to the study of the role of institutions in economic growth. Over the past four decades an influential group of economists – known under the label New Institutional Economics (NIE) – have focused their attention on the role of institutions. The objective of this section of the paper is to clarify whether law, according to North is a protagonist in the process of institutional change or is merely a by-product of changes taking place elsewhere in society. Finally, the paper discusses the role of law in North’s theory. The paper also examines North's theory of institutions focusing on three main issues: the pervasive influence of the principles of neoclassical economics the focus on an end-point model based on successful Western economies and the failure adequately to account for the role of organizations in the process of change. It examines North’s approach to institutions through his historical work focusing on his concept of credible commitment and his interpretation of the effect of the Glorious Revolution on property rights, focusing especially on the role he assigns to property rights in bringing about the Industrial Revolution. This paper offers a critical overview and assessment of North’s work on institutions and economic change, focusing on aspects of his work that are of interest to law and development scholars.
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