Escaping Paternalism
Rationality, Behavioral Economics, and Public Policy

A powerful critique of nudge theory and the paternalist policies of behavioral economics, and an argument for a more inclusive form of rationality.

Mario J. Rizzo (Author), Glen Whitman (Author)

9781108760003, Cambridge University Press

Paperback / softback, published 5 December 2019

506 pages, 3 b/w illus.
22.8 x 15.7 x 2.7 cm, 0.73 kg

'Mario J. Rizzo and Glen Whitman present a powerful and well-documented critique of behavioural economists' justifications of paternalism. They argue convincingly that these justifications illegitimately presuppose that rational-choice theory is a normative standard. Inspired by the psychology of Gerd Gigerenzer, they offer a more pragmatic and 'ecological' understanding of human rationality.' Robert Sugden, University of East Anglia

The burgeoning field of behavioral economics has produced a new set of justifications for paternalism. This book challenges behavioral paternalism on multiple levels, from the abstract and conceptual to the pragmatic and applied. Behavioral paternalism relies on a needlessly restrictive definition of rational behavior. It neglects nonstandard preferences, experimentation, and self-discovery. It relies on behavioral research that is often incomplete and unreliable. It demands a level of knowledge from policymakers that they cannot reasonably obtain. It assumes a political process largely immune to the effects of ignorance, irrationality, and the influence of special interests and moralists. Overall, behavioral paternalism underestimates the capacity of people to solve their own problems, while overestimating the ability of experts and policymakers to design beneficial interventions. The authors argue instead for a more inclusive theory of rationality in economic policymaking.

1. Introduction: puppets and puppet masters
2. What is rationality?
3. Rationality for puppets
4. Preference biases
5. The rationality of beliefs
6. Deficient foundations for behavioral policymaking
7. Knowledge problems in paternalist policymaking
8. The political economy of paternalist policymaking
9. Slippery slopes in paternalist policymaking
10. Common threads, escape routes, and paths forward
References
Index.

Subject Areas: Law [L], Business & management [KJ], Behavioural economics [KCK], Macroeconomics [KCB], Economics [KC], Politics & government [JP]