Viewing Douglass C. North & Andrew R. Rutten: "The Northwest Ordinance in Historical Perspective." (1987).
The Northwest Ordinance, passed by the Continental Congress on July 13, 1787, was, in the words of Professors Douglass North and Andrew Rutten, "a landmark in American economic history." Besides its famous guarantees of such rights as freedom of religion and prohibitions against slavery, taking of property without due process, and interference with contracts, it made it easy for settlers to secure clear title to land in the Northwest Territory, "making land easily transferrable and inheritable." It also provided that states formed from the Northwest Territory would join the Union on an equal footing with the original thirteen (eventually Ohio, Indiana, Illinois, Michigan and Wisconsin would join). This proved to be significant because, as new states were organized and admitted, there was a shift in power to the frontier states, which held different views toward the disposal of the public lands than did nonpublic land states in the East, Mid-Atlantic and South. In response to changing economic and political pressures, public land policies evolved, a process that was encouraged not hindered by the Northwest Ordinance. The authors commend the Ordinance's adaptive efficiency--that is, how well the structures it fostered adapted to new conditions to achieve allocative efficiency.