The Review of Austrian Economics

, Volume 25, Issue 3, pp 199–221 | Cite as

Time for behavioral political economy? An analysis of articles in behavioral economics

Article

Abstract

This study analyzes leading research in behavioral economics to see whether it contains advocacy of paternalism and whether it addresses the potential cognitive limitations and biases of the policymakers who are going to implement paternalist policies. The findings reveal that 20.7% of the studied articles in behavioral economics propose paternalist policy action and that 95.5% of these do not contain any analysis of the cognitive ability of policymakers. This suggests that behavioral political economy, in which the analytical tools of behavioral economics are applied to political decision-makers as well, would offer a useful extension of the research program. Such an extension could be related to the concept of robust political economy, according to which the case for paternalism should be subjected to “worst-case” assumptions, such as policymakers being less than fully rational.

Keywords

Behavioral economics Anomalies Rationality Homo economicus Public choice Robust political economy 
JEL Classification D03 D78 

Notes

Acknowledgments

We wish to thank Christian Bjørnskov, Geoffrey Brennan, Werner Güth, Daniel Hedblom, Arye Hillman, Manfred Holler, Dan Johansson, Henrik Jordahl, Daniel Klein, Mark Pennington, Per Skedinger and two anonymous referees, as well as participants in the conference “Philosophy, Politics and Economics of Public Choice: Reflections on Geoffrey Brennan’s Contributions” at the University of Turku, and participants in the Public Choice Meetings in San Antonio, for insightful comments; Lina Eriksson, Mounir Karadja, Camilla Sandberg and Hans Westerberg for excellent research assistance; and the Swedish Research Council for financial support.

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.The Research Institute of Industrial Economics (IFN)StockholmSweden

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