Local economic institutions (systems of property rights and rules of land u
se) influenced the course of economic change in European history, as well a
s state formation and religious change. In this paper, I outline the theore
tical implications of these regional effects. None of our existing macrolev
el theories and explanations of the "rise of the West" can adequately incor
porate them, so I present an alternative theory, based on rational choice p
remises. Yet the existence of these regional effects also highlights the de
ficiencies of a rational choice theoretical approach. First, the approach i
s unable to explain historical contexts, institutional legacies, or the eff
ects of timing, which were vital for outcomes of social change but that lie
outside the model itself. Second, although it can be very useful, the mode
l of the actor motivated by material self-interest often proved inadequate
in historical situations. Solutions are suggested.