A Conceptual Framework for Interpreting Recorded Human History
Neither economics nor political science can explain the process of modern social development. The fact that developed societies always have developed economies and developed polities suggests that the connection between economics and politics must be a fundamental part of the development process. This paper develops an integrated theory of economics and politics. We show how, beginning 10,000 years ago, limited access social orders developed that were able to control violence, provide order, and allow greater production through specialization and exchange. Limited access orders provide order by using the political system to limit economic entry to create rents, and then using the rents to stabilize the political system and limit violence. We call this type of political economy arrangement a natural state. It appears to be the natural way that human societies are organized, even in most of the contemporary world. In contrast, a handful of developed societies have developed open access social orders. In these societies, open access and entry into economic and political organizations sustains economic and political competition. Social order is sustained by competition rather than rent-creation. The key to understanding modern social development is understanding the transition from limited to open access social orders, which only a handful of countries have managed since WWII.
Spencer T. Olin Professor in Arts and Sciences, Washington University, St. Louis, and Senior Fellow, Hoover Institution; Professor of Economics, University of Maryland, Research Associate NBER, and Visiting Scholar Hoover Institution, Stanford University; and Senior Fellow, Hoover Institution, and Ward C. Krebs Family Professor, Department of Political Science, Stanford University. We gratefully acknowledge the comments we received in seminar presentations at the NBER-DAE Summer Institute, the University of Maryland, Stanford University, Washington University, the World Bank, the Mercatus Center at George Mason University, New York University and Yale University. We thank the Freeman-Spogli Institute's Presidential Fund for Innovation in International Studies, the Mercatus Center at George Mason University, and the Bradley Foundation for their support. Comments from Roger Betancourt, Price Fishback, Stephen Haber, and Richard Sylla were also very helpful. Steve Webb has aided and abetted our efforts at every step of the way. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
North, Douglas, John Joseph Wallis, and Barry Weingast. Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. Cambridge and New York: Cambridge University Press, 2009.