, Volume 142, Issue 1-2, pp 1-8
Date: 20 Oct 2009

Persuasion, slack, and traps: how can economists change the world?


Contrary to my critics, voter irrationality does not imply that economists cannot mitigate political failure. With rational voters, reform-minded economists have few viable tactics; with irrational voters reformers have more options. Rational voters can be swayed only by facts and logic; irrational voters could respond to better rhetoric. Rational voters strategically punish those who ignore their policy preferences; irrational voters use less effective disciplinary strategies that create political slack. Even with irrational voters, efficiency-enhancing reform is hard. With rational voters, however, democracy’s failure to adopt a reform is strong evidence that the reform does not enhance efficiency.

I thank Elle Cohen and Marta Podemska for excellent research assistance, the Mercatus Center for financial support, and members of the Ratio Institute and the Mont Pelerin Society for helpful comments.