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On the ‘cashing out’ hypothesis and ‘soft’ and ‘hard’ policies

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  • Brennan, Geoffrey
  • Brooks, Michael

Abstract

In the literature on paternalism that has grown out of the behavioural economics ‘revolution’, a distinction is drawn between ‘hard’ and ‘soft’ policies. Although this hard/soft distinction seems to be motivated by the thought that the two policy types might have different implications for individual liberty, there is a claim that ‘hard’ policies are normatively superior to ‘soft’ for ‘efficiency’ reasons. We show, by appeal to an esteem-based model of ‘soft’ policy that this claim is not valid in general. We also expose a number of conceptual mistakes in what many seem to have identified as the normative implications of behavioural economics.

Suggested Citation

  • Brennan, Geoffrey & Brooks, Michael, 2011. "On the ‘cashing out’ hypothesis and ‘soft’ and ‘hard’ policies," European Journal of Political Economy, Elsevier, vol. 27(4), pages 601-610.
    • Handle: RePEc:eee:poleco:v:27:y:2011:i:4:p:601-610
    DOI: 10.1016/j.ejpoleco.2011.06.001
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    Cited by:

    1. Schnellenbach, Jan, 2012. "Nudges and norms: On the political economy of soft paternalism," European Journal of Political Economy, Elsevier, vol. 28(2), pages 266-277.
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    3. Marina Bianchi, 2018. "Tibor Scitovsky as behavioral economist," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 2(1), pages 39-43, March.
    4. Collewet, Marion, 2014. "Approaches to well-being, use of psychology and paternalism in economics," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-25.
    5. Schubert Christian, 2015. "Behavioral Economics: Anmerkungen zum gleichnamigen Buch von Hanno Beck," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 66(1), pages 428-436, January.

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    More about this item

    Keywords

    ‘Hard’ and ‘soft’ paternalism; Social esteem; Israeli kindergarten puzzle; Emotional tax;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D6 - Microeconomics - - Welfare Economics
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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