Douglas North on role of strong institutions in economic development
Douglas North is an economist who dedicated most of his working life towards understanding the role of institution in economic development.
“Douglas North took economics out of its comfort zone. He brought in politics, sociology and history.” – The Great Economics by Linda Yueh.
Due to his hard work, Douglas won the Nobel Memorial Prize in Economic Sciences in 1993. He is a testament that you don’t have to be a faculty member at the top universities in the world to be successful.
Douglas North was an average student always scoring an average of a “C” in his courses. Despite that, he ended up graduating with a triple major in economics, political science and philosophy.
After serving as a navigator at the Merchant Marine, he pursued his doctorate degree in economics at UC Berkeley. After completing his studies, he started his academic career as an assistant professor at University of Washington.
“North was advising countries around the world on applying institutional analysis to their growth policies while in his 80’s.” Linda Yueh.
According to Douglas North, poor institutions are costly to the economy of any country. These institutions are required for proper checks and balances. Openness to globalization and rule of law are very important institutions for proper economic growth.
Africa needs to uphold the rule of law and open up boarders for international trade in order to grow and get out of the poverty trap.
Linda Yueh, in her book The Great Economists, observes that: “Sub Saharan Africa is the only region where the numbers of people living in extreme poverty has increased during the past three decades.”
Douglas died of esophageal cancer in 2015 at the age of 95.