Coevolving institutions and the paradox of informal constraints

Abstract We can all agree that institutions matter, though as to which matter most, and how much any of them the is, paraphrasing Douglass North's words at Nobel podium, unresolved after seven decades immense effort. suggest obstacle progress is paradigm New Institutional Economics itself. In this paper, we propose a new theory is: grounded in coevolving sources economic growth rather than rules constraining growth; deployed dynamical systems game theory. show with our approach some long-standing problems are resolved, particular, paradoxical perplexingly pervasive influence informal constraints on long-run character economies.