Kaplow–Shavell welfarism without continuity

Although Kaplow and Shavell (2001) have established a devastating result that ”any non-welfarist method of policy assessment violates the Pareto principle”, they use a problematic assumption of continuity: social welfare is continuous in a non-merit good. This paper proposes using proximity preservation, a concept in topological social choice theory, to rebuild their theorem. The advantage of the new assumption is twofold. First, it is adopted for a good substantive reason, and not for mere technical convenience —this assumption prevents magnification of small errors, and is thus irresistible for any careful social evaluations. Second, it is much weaker than any version of continuity and thus offers a much more solid foundation for the theorem. As such, the new proof in this paper greatly strengthens the original result.