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Voting with the Wallet

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  • Leonardo Becchetti

    ()
    (Department of Economics, Universitˆ Tor Vergata)

Abstract

The vote with the wallet is a new, emerging feature of economic participation and democracy in the globally-integrated market economy. This expression identifies the pivotal role that responsible consumption and investment can play in addressing social and environmental emergencies which have been aggravated by the asymmetry of power between domestic institutions and global corporations. In this paper, we examine (both in general and by using examples drawn from the financial and non-financial sectors) how ÒvotingÓ for producers which are at the forefront of a three-sided efficiency which reconciles the creation of economic value with social and environmental responsibility, may generate contagion effects by triggering ethical imitation of traditional profit-maximizing actors, thereby enhancing the production of positive social and environmental externalities. Within this new framework policies which reduce the search and information costs of voting with the wallet may help socioeconomic systems to exploit the bottom-up market forces of other-regarding preferences, thereby enhancing opportunities to achieve well-being with reduced top-down government intervention

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Paper provided by Econometica in its series Econometica Working Papers with number wp33.

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Length: 26
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:ent:wpaper:wp33

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Keywords: social responsibility; other regarding preferences.;

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