Skip to main content

Crisis and belief: confirmation bias and the behavioral political economy of recession

Constitutional Political Economy volume 25, pages 376–392 (2014)Cite this article

Abstract

The link between crisis and permanent increases in public spending has been investigated from the perspective of interest groups, bureaucratic growth, etc., while a demand perspective, i.e. the question of changing voter preferences, has been ignored. Survey data suggests that individuals become temporarily more in favor of government intervention in the aftermath of an economic crisis. The relationship is tested by an experiment in which salience of economic crisis generates favorable attitudes toward intervention for crisis related and unrelated topics.

This is a preview of subscription content, access via your institution.

Access options

Buy single article

Instant access to the full article PDF.

USD 39.95

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Fig. 1
Fig. 2

Notes

  1. I am grateful for the financial support provided by the Office of Research and Sponsored Programs at the University of Wisconsin, Eau Claire, and for valuable research assistance by Mitchell Fisher. All remaining errors are mine.

  2. https://www.youtube.com/watch?v=P19vzujCJl8.

  3. In the original, or European sense.

References

  • Akerlof, G., & Kranton, R. (2000). Economics and identity. The Quarterly Journal of Economics, 115(3), 715–753.

    Article  Google Scholar 

  • Bartels, L. M. (2002). Beyond the running tally: Partisan bias in political perceptions. Political Behavior, 24(2), 117–150.

    Article  Google Scholar 

  • Bennoit, K., & Laver, M. (2006). Party policy in modern democracies. London: Routledge.

    Google Scholar 

  • Brennan, G., & Buchanan, J. M. (1980). The power to tax: Analytical foundations of a fiscal constitution. Cambridge: Cambridge University Press.

    Google Scholar 

  • Buchanan, J. M., & Wagner, R. E. (1977). Democracy in deficit: The political legacy of Lord Keynes. New York: Academic Press.

  • Caplan, B. (2001a). Rational irrationality and the microfoundations of political failure. Public Choice, 107(3), 311–331.

    Article  Google Scholar 

  • Caplan, B. (2001b). Rational ignorance versus rational irrationality. Kyklos, 54(1), 3–26.

    Article  Google Scholar 

  • Caplan, B. (2007). The myth of the rational voter. Princeton: Princeton University Press.

    Google Scholar 

  • Caplan, B. (2010). Intelligence makes people think like economists: Evidence from the general social survey. Intelligence, 38(6), 636–647.

    Article  Google Scholar 

  • Chamlee-Wright, E., & Storr, H. V. (2011). Social capital, lobbying, and community bases interest groups. Public Choice, 149(1–2), 2011.

    Google Scholar 

  • Chapman, G. B., & Johnson, E. J. (2002). Incorporating the irrelevant: Anchors in judgments of belief and value. In T. Gilovich, D. Griffin, & T. Kahneman (Eds.), Heuristics and biases: The psychology of intuitive judgment. Cambridge, UK: Cambridge University Press.

    Google Scholar 

  • Coyne, C. (2011). Constitutions and crisis. Journal of Economic Behavior & Organization, 80(2), 351–357.

    Article  Google Scholar 

  • Darley, J. M., & Gross, P. H. (1983). A hypothesis—confirming bias in labeling effects. Journal of Personality and Social Psychology, 44(1), 20–33.

    Article  Google Scholar 

  • Eatwell, J., & Murray, M. (2011). The fall and rise of Keynesian economics. Oxford: Oxford University Press.

    Google Scholar 

  • Giuliano, P. (forthcoming). Growing up in a recession. The Review of Economic Studies.

  • Haidt, J. (2012). The righteous mind: Why good people are divided by politics and religion. New York City: Pantheon Books.

    Google Scholar 

  • Hayek, F. A. (1943). Scientism and the study of society. Economica, 10(37), 34–63.

    Article  Google Scholar 

  • Henrich, J., Heine, S. J., & Norenzayan, A. (2010). The weirdest people in the world? Behavioral and Brain Sciences, 33(2–3), 61–83.

    Article  Google Scholar 

  • Higgs, R. (1987). Crisis and leviathan: Critical episodes in the growth of American government. Oxford: Oxford University Press.

    Google Scholar 

  • Jacoby, W. G. (2000). Issue framing and public opinion on government spending. American Journal of Political Science, 44(4), 750–767.

    Article  Google Scholar 

  • Jost, J. T., Frederico, C. M., & Napier, J. L. (2009). Political ideology: Its structure, functions, and elective affinities. Annual Review of Psychology, 60, 307–337.

    Article  Google Scholar 

  • Kahan, D. M., Braman, D., & Jenkins-Smith, H. (2011). Cultural cognition of scientific consensus. Journal of Risk Research, 14(2), 147–174.

    Article  Google Scholar 

  • Klein, D. B., & Stern, C. (2005). Professors and their politics: The policy views of social scientists. Critical Review, 17, 257–303.

    Article  Google Scholar 

  • Knack, S., & Keefer, P. (1997). Does social capital have an economic payoff? A cross-country investigation, Quarterly Journal of Economics, 112(4), 1251–1288.

  • Koppl, R., & Luther, W. (2012). Hayek, Keynes, and modern macroeconomics. The Review of Austrian Economics, 25(3), 223–241.

    Article  Google Scholar 

  • Lord, C. G., Ross, L., & Lepper, M. R. (1979). Biased assimilation and attitude polarization: The effects of prior theories on subsequently considered evidence. Journal of Personality and Social Psychology, 37(11), 2098–2109.

    Article  Google Scholar 

  • Lord, C. G., Ross, L., & Preston, E. (1984). Considering the opposite: A corrective strategy for social judgment. Journal of Personality and Social Psychology, 47, 1231–1243.

    Article  Google Scholar 

  • Nickerson, R. S. (1998). Confirmation bias: A ubiquitous phenomenon in many guises. Review of General Psychology, 2(2), 175–220.

    Article  Google Scholar 

  • Plous, S. (1991). Biases in the assimilation of technological breakdowns: Do accidents make us safer? Journal of Applied Social Psychology, 21(13), 1058–1082.

    Article  Google Scholar 

  • Putnam, R. (2000). Bowling alone—The collapse and revival of American communities. New York City: Simon and Schuster.

    Google Scholar 

  • Rabin, M. (1998). Economics and psychology. Journal of Economic Literature, 36(1), 11–46.

    Google Scholar 

  • Runst, P. (2013). Popular attitudes towards markets & institutional reform. Review of Social Economy, 72(1), 83–115.

  • Runst, P., & Wagner, R. (2011). Choice, emergence, and constitutional process: A framework for positive analysis. Journal of Institutional Economics, 7(1), 131–145.

    Article  Google Scholar 

  • Schlicht, E. (1998). On custom in the economy. Oxford: Clarendon Press.

    Book  Google Scholar 

  • Searle, J. (1997). The construction of social reality. New York: Free Press.

    Google Scholar 

  • Smith, R. E. (2000). Research design. In H. T. Reis & C. M. Judd (Eds.), Handbook of research methods in social and personality psychology. Cambridge, UK: Cambridge University Press.

    Google Scholar 

  • Storr, V. (2009). Why the market? Markets as social and moral spaces, Journal of Markets and Morality, 12(2), 277–296.

  • Storr, V. (2010). The facts of the social sciences are what people believe and think. In P. J. Boettke (Ed.), Handbook of Austrian economics. Cheltenham: Edward Elgar.

    Google Scholar 

  • Taber, C. S., & Lodge, M. (2006). Motivated skepticism in the evaluation of political beliefs. American Journal of Political Science, 50(3), 755–769.

    Article  Google Scholar 

  • Thomas, D. W., & Martin, A. (2013). Two-tiered political entrepreneurship and the congressional committee system. Public Choice, 154(1–2), 21–37.

    Google Scholar 

  • Tullock, G. (1967). The welfare costs of tariffs, monopolies and theft. Western Economic Journal, 5, 224–232.

    Google Scholar 

  • Tullock, G. (1975). The transitional gains trap. The Bell Journal of Economics, 6(2), 671–678.

    Article  Google Scholar 

  • Wagner, R. (2010). Mind, society, and human action. London: Routledge.

    Google Scholar 

  • Wagner, R., Smith, A., & Yandle, B. (2011). A theory of entangled political economy, with application to TARP and NRA. Public Choice, 148, 45–66.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Institute for Small Business Economics, ifh, University of Göttingen, Heinrich-Düker-Weg 6, 37073, Göttingen, Germany

    Petrik Runst

Authors
  1. Petrik Runst
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Petrik Runst.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Runst, P. Crisis and belief: confirmation bias and the behavioral political economy of recession. Const Polit Econ 25, 376–392 (2014). https://doi.org/10.1007/s10602-014-9167-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10602-014-9167-x

Keywords

  • Behavioral political economy
  • Voting
  • Political preferences
  • Confirmation bias

JEL Classification

  • Z13
  • Z18
  • D03
  • H12