When Ideas Trump Interests: Preferences, Worldviews, and Policy Innovations
AbstractIdeas are strangely absent from modern models of political economy. In most prevailing theories of policy choice, the dominant role is instead played by "vested interests"?elites, lobbies, and rent-seeking groups which get their way at the expense of the general public. Any model of political economy in which organized interests do not figure prominently is likely to remain vacuous and incomplete. But it does not follow from this that interests are the ultimate determinant of political outcomes. Here I will challenge the notion that there is a well-defined mapping from "interests" to outcomes. This mapping depends on many unstated assumptions about the ideas that political agents have about: 1) what they are maximizing, 2) how the world works, and 3) the set of tools they have at their disposal to further their interests. Importantly, these ideas are subject to both manipulation and innovation, making them part of the political game. There is, in fact, a direct parallel, as I will show, between inventive activity in technology, which economists now routinely make endogenous in their models, and investment in persuasion and policy innovation in the political arena. I focus specifically on models professing to explain economic inefficiency and argue that outcomes in such models are determined as much by the ideas that elites are presumed to have on feasible strategies as by vested interests themselves. A corollary is that new ideas about policy?or policy entrepreneurship?can exert an independent effect on equilibrium outcomes even in the absence of changes in the configuration of political power. I conclude by discussing the sources of new ideas.
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Bibliographic InfoArticle provided by American Economic Association in its journal Journal of Economic Perspectives.
Volume (Year): 28 (2014)
Issue (Month): 1 (Winter)
Other versions of this item:
- Rodrik, Dani, 2013. "When Ideas Trump Interests: Preferences, World Views, and Policy Innovations," CEPR Discussion Papers 9734, C.E.P.R. Discussion Papers.
- Dani Rodrik, 2013. "When Ideas Trump Interests: Preferences, World Views, and Policy Innovations," NBER Working Papers 19631, National Bureau of Economic Research, Inc.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Nelson Mandela, Leadership and Ideas
by Daron Acemoglu and James Robinson in Why Nations Fail on 2013-12-13 22:51:39
- How Ideas Matter
by Daron Acemoglu and James Robinson in Why Nations Fail on 2013-12-31 02:32:22
- Hillel Rapoport & Andreas Steinmayr & Christoph Trebesch & Toman Omar Mahmoud, 2013.
"The Effect of Labor Migration on the Diffusion of Democracy: Evidence from a Former Soviet Republic,"
CReAM Discussion Paper Series
1320, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
- Toman Omar Mahmoud & Hillel Rapoport & Andreas Steinmayr & Christoph Trebesch, 2013. "The Effect of Labor Migration on the Diffusion of Democracy: Evidence from a Former Soviet Republic," Kiel Working Papers 1869, Kiel Institute for the World Economy.
- Mahmoud, Toman Omar & Rapoport, Hillel & Steinmayr, Andreas & Trebesch, Christoph, 2014. "The Effect of Labor Migration on the Diffusion of Democracy: Evidence from a Former Soviet Republic," IZA Discussion Papers 7980, Institute for the Study of Labor (IZA).
- Toman Omar Mahmoud & Hillel Rapoport & Andreas Steinmayr & Christoph Trebesch, 2013. "The Effect of Labor Migration on the Diffusion of Democracy: Evidence from a Former Soviet Republic," CESifo Working Paper Series 4389, CESifo Group Munich.
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