"We do not learn from experience, we learn from reflecting on experience." -John Dewey
As our understanding increases and global institutions become more complex, it is less and less likely for a single monolithic grand theory to properly explain the inner workings of all human societies. Whereas at one time it made perfect sense for economists to describe how industrialization, democracy, and markets function (at a time when there were relatively few examples of all of these), now there are simply too many distinct manifestations of these phenomena to accurately reduce to a set of basic principles.
At least a few theoretical responses have emerged to deal with this dilemma. First, neo-utilitarian theory suggests that all nation states are engaged in an iterative process of improvement. The different varieties of political economies and social policy programs are the results of this differentiated problem-solving process; countries will arrive at different solutions chiefly because of their differing levels of state capacity. For instance, governments marked by strong authoritarian executive branches will not likely have the institutional infrastructure and attitude sufficient to pursue extensive economic liberalization; they have too much momentum and incentives behind state-centered development initiatives, manipulation of domestic markets and production, and relative isolation from the global economy.
Some problems emerge from the neo-utilitarian approach. For one, it tends to assume that all forms of governance and economic systems will gradually converge toward a single, optimal model. This model, it is implied, should function just as superbly amidst any cultural, historical, or environmental context.
Relativists and skeptics deny, or at least question the suitability, of an approach based on a theoretical ideal state or end game. Really, the neo-utilitarian approach is not much of a departure from classical ideas about the governing dynamics of all societies.
Enter the comparative institutionalist approach. This methods eschews Hegelian teleology and instead instructs scholars to delve into the culture and history that helps shape the political, economic, and social institutions of all nations. Scholars employing the comparative institutional approach may incorporate extensive qualitative as well as quantitative studies in order to give sufficient attention to the substance of communication, relationships, and norms that define groups and the roles of individuals in them. Without such information, the argument goes, one can only obtain a partial understanding of the underlying principles governing political economies and their social policy. Grasping unique strategies for overcoming economic stagnation and governance issues–a strictly rationalist method–is only a part of the puzzle.
At the same time that institutionalist indicators incorporate discrete facts of history and communication patterns, however, scholars using this approach also strive to make general theoretical statements about the scope and significance of these non-traditional elements. For instance, studying the institutional norms surrounding examples of Japan’s lifetime employment system might shed light on how internal or firm-based labor markets strive to function in the United States. In sum, a thrust of general theory in institutionalist studies makes area or regional data more relevant and significant to scholars worldwide, and using non-traditional tools and content (qualitative methods, communication studies, norms, relationships) make theories more inclusive and accurate.
But is the comparative institutional approach free from scrutiny? I think that one possible challenge to this approach might be the phenomenon of social and institutional change. With the intensification of globalizing forces and media, local cultures, norms, and history may increasingly lessen their hold on institutions in some nations. In a markedly utilitarian fashion, states may selectively incorporate foreign institutional structures and norms in order to reap similar benefits or qualify for membership in global and regional institutions.
Still, to recognize that national systems of social, political and economic policy are exceedingly complex necessitates the inclusion of sufficiently complex and varied data. I think the comparative institutionalist perspective is a step in the right direction.