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The behavioural economist and the social planner: to whom should behavioural welfare economics be addressed?

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  • Robert Sugden

Abstract

This paper compares two alternative answers to the question, 'Who is the addressee of welfare economics?' These answers correspond with different understandings of the status of the normative conclusions of welfare economics, and have different implications for how welfare economics should be adapted in the light of the findings of behavioural economics. The conventional welfarist answer is that welfare economics is addressed to a 'social planner' whose objective is to maximise the overall well-being of society; the planner is imagined as a benevolent despot, receptive to the economist's advice. The alternative contractarian answer is that welfare economics is addressed to individuals who are seeking mutually beneficial agreements; a contractarian recommendation has the form 'It is in the interests of each of you separately that all of you together agree to do x'. Each of these answers should be understood as a literary convention which uses a highly-simplified model of politics. I defend the contractarian approach and show that it is less supportive of 'soft paternalism' than is the welfarist approach.
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  • Robert Sugden, 2011. "The behavioural economist and the social planner: to whom should behavioural welfare economics be addressed?," Papers on Economics and Evolution 2011-21, Philipps University Marburg, Department of Geography.
    • Handle: RePEc:esi:evopap:2011-21
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    References listed on IDEAS

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    7. Richard H. Thaler & Cass R. Sunstein, 2023. "Libertarian paternalism," Chapters, in: Cass R. Sunstein & Lucia A. Reisch (ed.), Research Handbook on Nudges and Society, chapter 1, pages 10-16, Edward Elgar Publishing.
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    Cited by:

    1. Martin Binder & Leonhard K. Lades, 2015. "Autonomy-Enhancing Paternalism," Kyklos, Wiley Blackwell, vol. 68(1), pages 3-27, February.
    2. Schubert, Christian, 2015. "Opportunity And Preference Learning," Economics and Philosophy, Cambridge University Press, vol. 31(2), pages 275-295, July.
    3. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    4. Martin Binder, 2014. "Should evolutionary economists embrace libertarian paternalism?," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 515-539, July.
    5. Schnellenbach, Jan & Schubert, Christian, 2014. "Behavioral public choice: A survey," Freiburg Discussion Papers on Constitutional Economics 14/03, Walter Eucken Institut e.V..
    6. James K. Hammitt, 2013. "Positive versus Normative Justifications for Benefit-Cost Analysis: Implications for Interpretation and Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(2), pages 199-218, July.
    7. Peter Lunn, 2015. "Are Consumer Decision-Making Phenomena a Fourth Market Failure?," Journal of Consumer Policy, Springer, vol. 38(3), pages 315-330, September.
    8. Correa Romar, 2014. "Mathematical Foci," Mathematical Economics Letters, De Gruyter, vol. 2(1-2), pages 5-11, August.

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    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D60 - Microeconomics - - Welfare Economics - - - General

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