Institutional and cultural research directions in development economics: Assumptions on agent motivation as a source of disagreement

In this paper we address the methodological discrepancies that exist between institutional and cultural approaches in modern literature devoted to the study of reasons for economic development in the long historical perspective. We analyze in detail and compare the ontological assumptions of the theories of key representatives of the institutional (D. Acemoglu, J. Robinson and D. North) and cultural research directions (J. Mokyr, D. McCloskey). We show that traditional ways of conceptualizing are insufficient for understanding the actual source of methodological disagreements existing between these approaches. We argue that the reason for such disagreements is the difference in implicit ontological assumptions regarding the motivation of agents between the theories under consideration. The authors of institutional theories, who do not consider it necessary to assign an independent role to cultural factors along with institutional ones, at the level of ontological assumptions reject the possibility of exogenous changes in the internal motivation of agents. At the same time, the authors of cultural theories, who distinguish institutional and cultural factors as independent from each other, in their theories acknowledge the presence of exogenous shocks of internal motivation and their potentially important role in economic changes. This discrepancy determines, on the one hand, the deductive nature of analytical narratives within the institutional research direction, and on the other hand, the inductive nature of the historical argumentation of representatives of the cultural research direction.