Douglass North has written many essays and books over forty or more years in which he has sought to reintegrate economic theory and economic history. His project became more and more ambitious over time, producing interesting insights, questions, and narratives. His early interests and work centered on the economics of location, transportation costs, and interregional economic relations in American history. In mid-career, he seized on transaction costs—modified from time to time by other “variables”—as the main motor of history, economic history, and institutional development.
In the end, though, North’s work runs aground because of its reliance on unrealistic models derived from positivist premises and a failure to understand the proper relationship between theory and history.
