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The political economy of paternalism

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  • Kai A. Konrad

    (Max Planck Institute for Tax Law and Public Finance)

Abstract

Some citizens place a high value on making decisions for themselves. Other citizens are happy to delegate decisions to a government agency. Such differences in political attitudes to paternalism can be explained in a strict rational-choice model with citizens’ heterogeneous tastes in the economic sphere. Citizens with more eccentric tastes and with high decision-making abilities tend to favor a libertarian regime. If majority preferences matter, heterogeneity in economic preferences and analytical abilities can also explain whether the political regime is more paternalist or more libertarian. As decision-making skills are a learnable capability, the strategic complementarity of individuals’ investments in analytical skills in the context of political regime outcomes suggests a feedback mechanism that can cause multiple expectations equilibria. Both a libertarian regime or a paternalist regime can emerge.

Suggested Citation

  • Kai A. Konrad, 2024. "The political economy of paternalism," Public Choice, Springer, vol. 201(1), pages 61-81, October.
    • Handle: RePEc:kap:pubcho:v:201:y:2024:i:1:d:10.1007_s11127-024-01168-y
    DOI: 10.1007/s11127-024-01168-y
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    More about this item

    Keywords

    Paternalism; Libertarianism; Autonomous decision-making; Majoritarian decisions; Decision skills; Formation of decision capabilities;
    All these keywords.

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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