Not trying to be rude, but you probably could have found this by searching. I'm still glad to share a compilation of what I found, though, as it seems to answer the question quite simply.

According to Wikipedia, (http://en.wikipedia.org/wiki/Paper_size)

The international paper size standard, ISO 216, is based on the German DIN 476 standard for paper sizes. ISO paper sizes are all based on a single aspect ratio of square root of 2, or approximately 1:1.4142. The base A0 size of paper is defined to have an area of 1 m2. Rounded to millimetres, the A0 paper size is 841 by 1,189 millimetres (33.1 in × 46.8 in).

From what I can gather, the German institution responsible for their country's standardization (DIN) adopted this as their standard paper size. And the reason for this is mathematical in nature.

The significant advantage of this system is its scaling: if a sheet with an aspect ratio of sqrt{2} is divided into two equal halves parallel to its shortest sides, then the halves will again have an aspect ratio of sqrt{2}.

Basically, you can keep folding it in half and it will maintain it's aspect ratio, or the ratio of height to width. As for who is credited with this;

The advantages of basing a paper size upon an aspect ratio of sqrt{2} were first noted in 1786 by the German scientist and philosopher Georg Christoph Lichtenberg. Early in the 20th century, Dr Walter Porstmann turned Lichtenberg's idea into a proper system of different paper sizes. Porstmann's system was introduced as a DIN standard (DIN 476) in Germany in 1922, replacing a vast variety of other paper formats. Even today the paper sizes are called "DIN A4" (IPA: [diːn.ʔaː.fiːɐ̯]) in everyday use in Germany and Austria. The term Lichtenberg ratio has recently been proposed for this paper aspect ratio.

It's apparently the sensible paper size, and many other countries caught on.

By 1975 so many countries were using the German system that it was established as an ISO standard, as well as the official United Nations document format. By 1977 A4 was the standard letter format in 88 of 148 countries. Today the standard has been adopted by all countries in the world except the United States. In Mexico, Costa Rica, Colombia, Venezuela, Chile and the Philippines the US letter format is still in common use, despite their official adoption of the ISO standard.

Sorry to quote exactly from the wikipedia article, but it seems to completely answer your question so I don't see any harm in it. If I'm wrong a moderator can remove my post.

Who do you mean by "our"? North American or the rest of the world?