Paternalist economic policies: foundations, options, and challenges

  • This paper analyzes the inherent dangers of paternalist economic policies associated with the newly established economic sub-disciplines of behavioral economics, economic happiness research and economic psychology. While the authors in general welcome these sub-disciplines for enriching and critically evaluating mainstream economics – especially their criticism of the Homo oeconomicus-heuristic is of great value contributing to a more realistic idea of man –, the political-economic implications as well as inherent risks of paternalist economic policies should be received with concern and thus be subject to a critical review. The paper is structured as follows: In the first step, we recapitulate Kahneman’s, Thaler/Sunstein’s, and Layard’s versions of paternalism pointing at similarities and differences alike. We contrast libertarian or soft paternalism of behavioral economics (Thaler/Sunstein) and economic psychology (Kahneman) with (Layard’s) happiness economics and its hard paternalism. In the second step, we analyze the political and economic implications and consequences of paternalism. We give an overview of the main points of criticism of paternalism from a constitutional economics perspective. The Ordnungs- vs. Prozesspolitik argument is discussed as well as epistemological, political-economic or idea of man arguments. The paper ends with some concluding remarks.

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Author:Rainer KlumpORCiDGND, Manuel Wörsdörfer
Document Type:Report
Year of Completion:2013
Year of first Publication:2013
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2014/03/20
Tag:Constitutional Economics; D. Kahneman; Libertarian / Soft Paternalism; R. Layard; R. Thaler
Page Number:31
First Page:1
Last Page:31
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Exzellenzcluster / Exzellenzcluster Die Herausbildung normativer Ordnungen
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
3 Sozialwissenschaften / 34 Recht / 340 Recht
JEL-Classification:B History of Economic Thought, Methodology, and Heterodox Approaches (Updated!) / B2 History of Economic Thought since 1925 / B25 Historical; Institutional; Evolutionary; Austrian
B History of Economic Thought, Methodology, and Heterodox Approaches (Updated!) / B5 Current Heterodox Approaches
Licence (German):License LogoDeutsches Urheberrecht