1.8. Conclusion

Institutional change requires a transformation of beliefs, expectations, and normative attributions. However, the neoclassical model of society is utterly atomistic, leaving no space for spontaneously developed social arrangements or common intelligence. In other words, any kind of institutional change (the guarantee of equal rights, widening the scope of civil rights, establishing animals’ rights, criminalization of domestic violence, and so on, and so forth) can be only conceptualized as i) radical exogenous change in social preferences; or ii) violating the principles of the collective choice under the orthodox economic framework. In contrast, admitting to the idea that social exchange is governed by social norms, at the same time contributing to their creation, makes things make much more sense. And this is the main argument against the neoclassical social choice theory pursued in this chapter.

Under the mainstream economic framework, pro-social behaviour can be only conceptualized, explained, and analysed as the product of conscious self-optimization. Consequently, stable and exogenously defined social preferences serve as the mechanism incorporating altruistic motives to the neoclassical research program due to the reductionist approach featured by the latter. The rivalrous approach – ecological rationality school – denies the Max-U decision-making principle, e.g., the idea that decision-making can be conceptualized as the deliberate self-optimization process. From this point of view, pro-social behaviour is viewed as following social heuristics, which is subject to endogenous development and evolutionary selection. Not attempting to question the ontological ground of the neoclassical social preferences and public choice framework, the present discussion addressed the question of whether the process of social change (i.e., the transformation of informal institutional environment and individuals’ normative attributions) can be adequately explained under the orthodox research program. Under the neoclassical framework, the process of informal institutional environment metamorphosis can only occur under the exogenous change in social preferences (i.e., individuals’ values) or under violating the SWF assumptions of non-dictatorship and non-imposition. In other words, there is no way to assess the evolution of social norms as the endogenous process. Moreover, the very idea of social norms is not compatible with the atomistic approach to social exchange and social interaction. Therefore, one can conclude that the neoclassical research program is unable to incorporate the pro-social behaviour phenomenon.