The idea that modern economics is necessarily based on market capitalism continues to dominate in scientific-scholarly discourse. The objective of this article is to present institutional matrix theory, or X- and Y-theory, as an alternative systemic institutional approach to economic and political development. It puts forward some new arguments to explain "grassroots resistance" to the deep marketization in many societies and answers the question why capitalism triumphs in the West and fails everywhere else.

JEL Classification: P51, B52, A13