Understanding the Process of Economic Change. By Douglass C. North. Princeton: Princeton University Press, 2005. 187p. $29.95.

When the Soviet Union collapsed and rapid integration into world markets failed to produce anything like an effective capitalist economy in its Russian successor state, many economists found that failure puzzling. Not Douglass North. So far as I know, North did not predict the Soviet Union's fall or the subsequent chaos of its economy. But he had long since put in place an account of economic change raising serious doubts that markets alone could even function reasonably well, much less transform whole economies, without extensive institutional underpinnings.