When Ideas Trump Interests: Preferences, World Views, and Policy Innovations

37 Pages Posted: 19 Nov 2013

See all articles by Dani Rodrik

Dani Rodrik

Harvard University - Harvard Kennedy School (HKS); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

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Date Written: November 2013

Abstract

The contemporary approach to political economy is built around vested interests -- elites, lobbies, and rent-seeking groups which get their way at the expense of the general public. The role of ideas in shaping those interests is typically ignored or downplayed. Yet each of the three components of the standard optimization problem in political economy – preferences, constraints, and choice variables – rely on an implicit set of ideas. Once the manner in which ideas enter these frameworks is made explicit, a much richer and more convincing set of results can be obtained. In particular, 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.

Keywords: Policy Innovations, Political Economy

JEL Classification: F5, P16

Suggested Citation

Rodrik, Dani, When Ideas Trump Interests: Preferences, World Views, and Policy Innovations (November 2013). CEPR Discussion Paper No. DP9734. Available at SSRN: https://ssrn.com/abstract=2356964

Dani Rodrik (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

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HOME PAGE: http://www.ksg.harvard.edu/rodrik/

Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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