Economists Carol Shiue and Wolfgang Keller of the University of Colorado published a study of "market efficiency" in the eighteenth century in England, other European countries, and China. If the markets in a country are efficient, a product should have the same price wherever in the country it is sold, allowing for the effect of transportation costs. If prices are not the same in two areas within a country, it is possible to make a profit by buying the product where its price is low and reselling it where its price is high. This trading will drive prices to equality. Trade is most likely to occur, however, if entrepreneurs feel confident that the government will not seize their gains and the courts will enforce contracts. Therefore, in the eighteenth century, the more efficient a country's markets, the more its institutions favored long-run growth. Shiue and Keller found that in 1770, the efficiency of markets in England was significantly greater than the efficiency of markets elsewhere in Europe and in China.
How does this finding relate to Douglass North's argument concerning why the Industrial Revolution occurred in England?