Hybrid Views on Endogenous and Exogenous Influences in Economics: The Case of International Economic Development

Abstract

Economists debate whether influences on their work are external (“exogenous”) to it or reflect dynamics internal (“endogenous”) to their discipline.This paper argues that a hybrid view that recognizes both types of influence most accurately describes the activity of economists engaged in practical sub-disciplines. To support the hybrid approach, we discuss three generations of the debate -- primarily sociological in approach -- on the relative roles of endogenous and exogenous influences, each generation improving on the previous. The post-WWII history of international economic development theory provides a case study.This debate has important implications for the practice of economics. Economists need awareness of the historical forces and philosophical assumptions that influence their work. This helps them avoid undue reliance on endogenously-developed theoretical and mathematical models.We conclude that an explicit turn from sociology to philosophy will enrich understanding of the debate, especially by showing the proper scope of economics compared to other disciplines.