Methodological Individualismand Methodological Institutionalism

Abstract

In the paper the capabilities and limitations of methodological individualism as a core principle of mainstream economics are explored. The recent debate dealing with methodological individualism in economics is considered. Institutional individualism principle is tested. As a challenging view, premises for methodological institutionalism are offered and considered as an alternative and complementary precondition of the different vision for economic theory.

Institutional Factors of Competitiveness and Development of the National Economy

“…The set of institutions of the socio-economic system forms an institutional environment, which is considered by modern scholars as an institution, but of a special kindas a matrix of higher order development, on the basis of which the formation and selection of the most effective economic and social institutions take place [5]. Depending on the characteristics of the institutional environment, the development of the socio-economic system may occur in different scenarios and have different dynamics and different results.…”

“…However, they have been considered largely at the macroeconomic level in the context of the development of national economies as integral socio-economic systems. In particular, V. Volchyk [2], A. Hrytsenko [3], V. Dementyev [4], G. Kirdina [5], G. Kleiner [6], R. Nureyev [7], Y. Olsevych [8], V. Polterovych [9], L.Tomilina [10] and many others carried out an active scientific search in the early 2000s. They examined the features of the influence of institutions on the formation of the system of government [4] and social processes [2], [6], [8], investigated the vectors and the power of their influence on the overall economic growth [2], [8], [10], the causes of institutional traps [9], opportunities for designing of institutional changes [6], [7], proposed the theory of institutional matrices [5], developed recommendations for research and improvement of institutional architectonics of economic systems [3] and many more.…”

Mesoeconomics from the Heterodox Perspective and Its Structure

“…Heterodox mesoeconomics is characterised by the rejection of "simplified" microeconomic foundations 17 , relying on mesoeconomic foundations instead. Among them we distinguish: 1) recognition of the systemic nature of the economy; 2) the primacy of the role of structural and institutional design of economic processes, which means relying on the principle of methodological institutionalism (Kirdina, 2015) instead of on the principle of methodological individualism that dominates in neoclassical micro-and macroeconomics; 3) consideration of the nonlinear nature of economic processes, expressed in the complexity of the economy, and the presence of positive and negative feedbacks -it is this nonlinearity that determines the need for the formation of stable mesoeconomic structures to restrain economic chaos. We believe that further development of heterodox economics -including heterodox mesoeconomics, -can lead to a change in the economic paradigm that will be more consistent with the real complexity of the modern world, and we will see the "revival of the mesoeconomics challenging the bipolar world of micro-and macroeconomics" predicted almost 40 years ago (Hahn, 1983, p. 3).…”

Meso-Level of Economy: Theoretical Approaches and Math Modeling

“…In the context of methodological institutionalism meso level is considered in the works of S.G. Kirdina (Kirdina, 2013;Kirdina, 2015;Kirdina, 2016), where it is described as an opportunity to pass between the Scylla and Charybdis of two methodological extremes, characteristic of both economics and sociology: methodological individualism and methodological holism. In a similar vein, the above-mentioned T.R.…”