This introduction considers the highly influential contribution of Douglass C. North to economic history and institutional economics, as it developed from the 1960s until his death in 2015. It sketches the evolution of his arguments concerning the roles of institutions, organizations and human agency. North's conception of the economic actor became progressively more sophisticated, by acknowledging the role of ideology and adopting insights from cognitive science. Eventually, he abandoned the proposition that institutions are generally efficient, to propose instead that sub-optimal institutional forms could persist. A few noted criticisms of North's work are also considered here, ranging from those which are arguably off the mark, to others that retain some force. The contributions to this memorial issue are outlined at the end of this introduction.

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.

In this paper, we trace the emergence and the evolution of property rights from the Homeric Era (1100–750 BCE) to Classical Greece, based on ancient sources and modern interpretations. Indications of the emergence of property rights are to be found in the writings of eighth century Homer and Hesiod. Property rights evolved, together with changes in warfare and city-states during the Archaic and Classical periods, becoming more secure and specific, based on contracts. We analyse as case studies Themistocles’ Naval Law of 483/2 BCE and Nicophon's Monetary Law of 376/5. We also cover some other aspects of property rights, such as commercial transactions and the enforcement of contracts, official (written) law and legally binding procedures of law enforcement, banking services and the rights of women.

In a seminal 1989 article, Douglass North and Barry Weingast argued that by making the monarch more answerable to Parliament, the Glorious Revolution of 1688 helped to secure property rights in England and stimulate the rise of capitalism. Similarly, Daron Acemoglu, Simon Johnson, and James Robinson later wrote that in the English Middle Ages there was a ‘lack of property rights for landowners, merchants and proto-industrialists’ and the ‘strengthening’ of property rights in the late 17th century ‘spurred a process of financial and commercial expansion’. There are several problems with these arguments. Property rights in England were relatively secure from the 13th century. A major developmental problem was not the security of rights but their feudal nature, including widespread ‘entails’ and ‘strict settlements’. 1688 had no obvious direct effect on property rights. Given these criticisms, what changes promoted the rise of capitalism? A more plausible answer is found by addressing the post-1688 Financial and Administrative Revolutions, which were pressured by the enhanced needs of war and Britain's expanding global role. Guided by a more powerful Parliament, this new financial system stimulated reforms to landed property rights, the growth of collateralizable property and saleable debt, and thus enabled the Industrial Revolution.

In ‘Violence and Social Orders’, North, Wallis and Weingast highlight the need of societies to control large-scale violence. In response to this need, a variety of social orders has emerged with differing institutional, political and economic characteristics. One of these social orders is the limited access order that was prevalent in most of history and still is nowadays. Taking the conceptual framework of North et al. as a starting point, we make three advances to their analysis of limited access orders. First, we analyse the incentive structure of actors involved, using a formal model of the main interactions in a limited access order. Second, we decompose organizations into two types and analyse their respective roles. Third, we use insights from historical research to scrutinize the chronology of the rise of organizations. Jointly, this allows us to refine and substantiate the insights gained by North et al., highlight the role of organizations and place the start of relevant developments earlier in time.

North (1994) famously remarked that ‘it is the polity that defines and enforces property rights’. This paper traces the development of property rights in Poland and Ukraine and explores their divergence over the past three centuries using North's framework of economic calculation. In each country, the distribution of political power and political institutions had a profound impact on property rights. Indeed, while it was the Polish polity that defined the evolution of property rights from 1386 to 1795 and then from 1989 onward, due to diffusion of power, it was Ukrainian politicians that controlled the destiny of property rights for most of Ukraine's history. This situation has not changed despite the Maidan revolution in Ukraine, and recent moves in Poland show how tenuous property rights are in the face of political opposition.

Our paper adopts Douglass North's institutional framework to explain why the colonies of Western Australia and South Australia, established in 1829 and 1836, respectively, had considerable disparities in economic growth up the end of 1900. Both colonies were established under different modes of organisation (colonisation). The method adopted for WA harked back to Mercantilism, famously condemned by Adam Smith because it led to under-investment in, and over-exploitation of, colonial assets. SA on the other hand was the product of a radical new theory in colonisation proposed by Edward Gibbon Wakefield whereby land, instead of being given away as in WA, was sold at a fixed price with the proceeds being used to subsidise gender-balanced immigration. Outcomes suggest that SA's method of ‘systematic colonisation’ introduced a better institutional matrix, compared to the initial institutions seeded in WA, allowing SA's economy to develop sooner and at a higher rate of growth. However, once the detrimental effects of its method of foundation were eliminated, occurring on the eve of one of the largest gold discoveries of modern times, WA's institutions finally provided the necessary incentives for economic development such that by the end of 1900, it had equalled SA's level of economic output if not exceeded it.

This paper uses the institutional economics of Douglass North to explain three features of the shale boom: why fracking technology emerged in the United States, the rapid increase in production of natural gas in the United States and the uneven response to these new economic opportunities in shale-rich economies. It argues that the institutional matrix of the United States, in particular private ownership of minerals, encouraged experimentation on the barren Texas oil and gas fields, where fracking technology emerged and the rapid transfer of mineral rights to gas companies. Institutional entrepreneurs, namely landmen and lawyers, facilitated contracting between owners of mineral rights and drillers. Private ownership of minerals and an ideology supportive of drilling provide insight into the adoption of regulations that encourage hydraulic fracturing.

Two shifts of informal rules occurred in the decades around the turn of the 20th century that continue to shape U.S. fiscal policy outcomes. Spending norms in the electorate shifted to expand the scope of the government budget to promote economic security and macroeconomic stability. Simultaneously, norms for elected office shifted to careerism. Both norms were later codified into formal rules as legislation creating entitlement programs, macroeconomic responsibility, and organizational changes to the fiscal policy process. This institutional evolution increased demand for federal expenditures while creating budgetary commons, thus imparting strong motivations to spend through deficit finance in normal times. Despite the last four decades of legislative attempts to constrain spending relative to taxes, the informal norms have trumped the formal constraints. While the empirical literature on deficits has examined the constraining effects of informal rules, this paper offers a novel treatment of shifting norms as having expansionary effects on deficits.