Abstract
A strong current in development economics rejects the application of neoclassical economics to Third World contexts. Methodological individualism and rational choice theory—seen as the ideological and methodological foundation for neoclassical economics—are often cited as reasons for the failure of neoclassical economics. In this essay, I argue that methodological individualism is no less suited to studying Third World societies than Western societies. Rational choice theory, on the other hand, is an empirical theory about decision-making, and must be empirically justified in the society where it is applied. The lack of interest in the empirical study of human behaviour on the part of neoclassical economists suggests that they should pay more attention to the demands made by methodological individualism, not less.
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