324 research outputs found
Market democracy, rising populism, and contemporary ordoliberalism
No full textFor several decades, what has been called the "liberal cosmopolitan-minded urban elites" set the political agenda of Western democracies (Dold and Krieger 2019a). They aimed at personal freedom and upward social mobility by means of a meritocratic system that was safeguarded by a combination of a competitive market economy, a liberal and open democracy, and the rule of law (Fuest 2018). These elites welcomed the opening of the Iron Curtain as the "end point of mankind's ideological evolution and the universalization of Western liberal democracy" (Fukuyama 1989, 4). However, political realities have challenged this perspective severely in recent years (Dold and Krieger 2019a). Around the globe, but especially in the liberal Western market democracies - i.e., societies in which "markets and democracy have coexisted quite healthily" in the post-World War II era (Chua 2000, 289) - populist movements have gained prominence in public discourse and in some cases even won elections (e.g., in Hungary, the Netherlands, Italy, Poland, or Sweden). There is ongoing debate over the causes of the rise of populist movements in the early 21st century (Gidron and Hall 2017; Guiso et al. 2017; Inglehart and Norris 2017; Mudde and Kaltwasser 2017). While important, our chapter will touch upon this debate only in passing, though, and instead focus on the consequences of populism's rise; in particular, we will ask how to deal with the populist challenge to the liberal order. We do so in three steps, thereby referring to one specific liberal conception, ordoliberalism. Considering ordoliberalism is instructive because, on the one hand, it strives for a "functioning and humane order of the economy, society, law, and the state" (Eucken 1990 [1952], 373; our italics), which is a much broader idea of liberalism than pure economic liberalism. On the other hand, critics argue that ordoliberalism has failed on following up on its own agenda (Dold and Krieger 2019b and 2023). They believe that ordoliberalism is the culprit of various misguided developments since the Eurozone crisis of 2009, which then provided a breeding ground for populism (Algan et al. 2017; Dold and Krieger 2019a). In their view, this is also related to ordoliberalism's - alleged - preference of the rule of law and economic freedom over democratic decision-making
Introduction: Symposium on Escaping Paternalism: Rationality, Behavioral Economics and Public Policy by Mario J. Rizzo and Glen Whitman
No full textRizzo and Whitman’s Escaping Paternalism (2019) is, at once, a scholarly treatise on the nature of rationality and a powerful critique of the use of behavioral insights to support a new paternalism in public policy. Since its recent publication, it has informed research, among other things, into the decision processes of paternalist policymakers (Ambuehl, Bernheim, and Ockenfels 2021), the implications of dynamic preferences for tax policy (Delmotte and Dold 2021), and alternative theoretical grounds for behavioral policymaking (Sunstein 2021; Sugden 2021; Rizzo and Whitman 2021). Its theoretical depth has far-reaching implications for methodological discussions within behavioral economics and the scope of government action beyond contemporary policy debates. We are very grateful to the editor of the Review of Behavioral Economics for hosting this critical interdisciplinary discussion of the book. In this introduction, we briefly review the key arguments from Escaping Paternalism and then summarize the contributions to the symposium. The diverse views expressed therein show that Rizzo and Whitman’s critique of the methodological robustness of behavioral biases and their proposal of a “paternalism-resisting framework” is stimulating, but not uncontroversial. This special issue is an invitation to further engage with Rizzo and Whitman’s arguments and, in doing so, advance both the methodological debate about key concepts in behavioral economics (such as rationality, biases, internalities, or welfare) and the normative debate about the implications of behavioral insights for policymaking.</p
Condorcet’s Jury Theorem as a Rational Justification of Soft Paternalistic Consumer Policies
No full textIntroduction: Symposium on Escaping Paternalism: Rationality, Behavioral Economics and Public Policy by Mario J. Rizzo and Glen Whitman
No full textRizzo and Whitman’s Escaping Paternalism (2019) is, at once, a scholarly treatise on the nature of rationality and a powerful critique of the use of behavioral insights to support a new paternalism in public policy. Since its recent publication, it has informed research, among other things, into the decision processes of paternalist policymakers (Ambuehl, Bernheim, and Ockenfels 2021), the implications of dynamic preferences for tax policy (Delmotte and Dold 2021), and alternative theoretical grounds for behavioral policymaking (Sunstein 2021; Sugden 2021; Rizzo and Whitman 2021). Its theoretical depth has far-reaching implications for methodological discussions within behavioral economics and the scope of government action beyond contemporary policy debates. We are very grateful to the editor of the Review of Behavioral Economics for hosting this critical interdisciplinary discussion of the book. In this introduction, we briefly review the key arguments from Escaping Paternalism and then summarize the contributions to the symposium. The diverse views expressed therein show that Rizzo and Whitman’s critique of the methodological robustness of behavioral biases and their proposal of a “paternalism-resisting framework” is stimulating, but not uncontroversial. This special issue is an invitation to further engage with Rizzo and Whitman’s arguments and, in doing so, advance both the methodological debate about key concepts in behavioral economics (such as rationality, biases, internalities, or welfare) and the normative debate about the implications of behavioral insights for policymaking.</p
Ordoliberalism: neither exclusively German nor an oddity. A review essay of Malte Dold’s and Tim Krieger’s Ordoliberalism and European Economic Policy: Between Realpolitik and Economic Utopia.
No full textThe German intellectual tradition of ordoliberalism, a variant of neoliberalism particularly committed to a "functional and humane order," was long ignored in the Anglo-Saxon world. More recently, this has changed to some degree, especially under the impression of the European sovereign-debt crisis, during which Germany's insistence on rule-abiding behavior was critically attributed to the ordoliberal heritage. In the anthology edited by Malte Dold and Tim Krieger, ordoliberalism is discussed from many different angles, including the historical roots in the Freiburg School, the recent much-disputed strategies for dealing with the eurozone crisis, and a further development of the research program. The editors argue that scholarship in the spirit of ordoliberalism would benefit from being embedded within the interdisciplinary scientific cluster of Philosophy, Politics and Economics (PPE). The book makes a valuable contribution to a better-informed international discourse across the disciplines
Behavioural normative economics: foundations, approaches and trends
No full textThis article summarises the theoretical foundations, main approaches and current trends in the field of behavioural normative economics. It identifies bounded rationality and bounded willpower as the two core concepts that have motivated the field. Since the concepts allow for individual preferences to be context-dependent and time-inconsistent, they pose an intricate problem for standard welfare analysis. The article discusses the ways in which two prominent approaches - the preference purification approach and the opportunity approach - have tackled the problem. It argues that shortcomings in each of these approaches motivate an agency-centric perspective. The article presents two concrete policy proposals of the agency-centric approach. While this approach is promising, the article argues for pluralism in normative economics since an exclusive focus on agency can likely not do justice to the multifarious concerns that citizens hold
Condorcet's jury theorem as a rational justification of soft paternalistic consumer policies
No full textThe objective of this note is to revisit the meaningfulness of the Condorcet Jury Theorem (CJT) and apply it to the recent debate on liberal paternalism and consumer protection. The CJT con-sists of two parts, (a) stating that a jury of experts is always more competent than a single expert given a certain level of competence, and (b) asserting that for large juries, the collective com-petence approaches infallibility. This note argues that these insights suggest the application of a Condorcet jury voting procedure to the case of nudging boundedly rational consumers. The note proposes a simple calculus for finding an optimal jury size and advocates consumers' meta-preferences as the jury's evaluative dimension for designing soft paternalistic policies
Methodological Individualism in Behavioral Economics
No full textThis chapter discusses the role of methodological individualism in behavioral economics. Since behavioral economics developed in reaction to traditional microeconomics, the chapter sketches first the latter’s understanding of methodological individualism. It argues that traditional microeconomics is based on three principles: the self-interest principle, the rationality principle, and the social change principle. The chapter then discusses experimental findings that led behavioral economists to relax all three principles. It argues that, in particular, the relaxation of the social change principle pushes the boundaries of methodological individualism as understood in traditional microeconomics since it highlights ways in which social institutions, norms, and rules affect individual processes of preference formation. In doing so, behavioral economics invites intricate methodological discussions of the bidirectional relationship between social institutions and individual actions
Non-standard preferences, welfare, and public policy : methodological and normative implications of behavioral economics
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