The paper provides a critical assessment of pan-institutionalism - an approach which tries to explain the course of the world economic history by changes in formal economic and formal political institutions. The paper demonstrates methodological narrowness, conceptual inconsistency and historical inadequacy of pan-institutionalism. The second part of the article analyzes the historical ideas of pan-institutionalists and shows that this approach fails to provide a coherent explanation of the turning point of the world economic history - the Industrial revolution in England in the mid of XVIII century, i.e. a transition from Malthusian to Schumpeterian economic growth.