In some respects this is intended to be a revolutionary book, but in other respects it is very traditional indeed. It is revolutionary in that we hav… - Douglass North

The factors we have listed (innovation, economies of scale, education, capital accumulation, etc.) are not causes of growth; they are growth.

Economic growth occurs if output grows faster than population. Given the described assumptions about the way people behave, economic growth will occur if property rights make it worthwhile to undertake socially productive activity. The creating, specifying and enacting of such property rights are costly... As the potential grows for private gains to exceed transaction costs, efforts will be made to establish such property rights. Governments take over the protection and enforcement of property rights because they can do it at a lower cost than private volunteer groups. However, the fiscal needs of government may induce the protection of certain property rights which hinder rather than promote growth; therefore we have no guarantee that productive institutional arrangements will emerge.

Effective institutions raise the benefits of cooperative solutions or the costs of defection, to use game theoretic terms.