Behavioral Political Economy: A Survey
Posted: 5 Feb 2014 Last revised: 25 Apr 2015
Date Written: April 13, 2015
In explaining individual behavior in politics, economists should rely on the same motivational assumptions they use to explain behavior in the market: That is what Political Economy, understood as the application of economics to the study of political processes, is all about. In its standard variant, individuals who play the game of politics should also be considered rational and self-interested, unlike the benevolent despot of traditional welfare economics. History repeats itself with the rise of behavioral economics: Assuming cognitive biases to be present in the market, but not in politics, behavioral economists often call for government to intervene in a “benevolent” way. Recently, however, political economists have started to apply behavioral economics insights to the study of political processes, thereby re-establishing a unified methodology. This paper surveys the current state of the emerging field of “Behavioral Political Economy” and considers the scope for further research.
Keywords: Behavioral Political Economy; Behavioral Economics; Rational Irrationality; Cognitive Biases; Social Norms; Voting; Paternalism.
JEL Classification: D78, D03, A12, D72
Suggested Citation: Suggested Citation