The government economic agenda in a society of unequally rational individuals
AbstractWhat economic roles, if any, should government play? This is still an incompletely analyzed issue that different individuals – depending on their ideologies, rent-seeking opportunities, and analytical abilities – may answer very differently. To advance its analysis, this paper recognizes that human rationality (as empirically testable cognitive abilities) is bounded unequally across individuals, and is therefore a unique scarce resource that markets and government allocate in significantly different ways. The results conflict with ideologies of both socialism and classical liberalism, but agree with two puzzles of recent economic history and with ideological compromises in actual economic policies.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 19127.
Date of creation: 11 Nov 2008
Date of revision: 06 Dec 2009
unequally bounded rationality; rationality-allocation; markets; government; economic policies;
Find related papers by JEL classification:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- I0 - Health, Education, and Welfare - - General
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- A10 - General Economics and Teaching - - General Economics - - - General
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