ABSTRACT
A central concern of Douglass North’s work has been an examination of the way in which institutions interact with, and influence, long-run economic change. As he has recently written, ‘the polity and economy are inextricably interlinked in any understanding of the performance of an economy and therefore we must develop a true political economy discipline’ (North 1990a: 112). If economic historians want to evolve a satisfactory explanation about why the Industrial Revolution has taken so long to become a universal phenomenon and why so many parts of the world are still economically backward and undeveloped, it is necessary to look not just at the way particular polities have specified and enforced property rights, but also at the larger issue of the way governments intervene to regulate private and public enterprises, and raise and spend resources. In short, it is essential to examine the economic role of governments, how that role has changed over time in the context of a specific economy, and how it varies across countries at a particular point in time.
