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A Constitutional Economics Perspective on Soft Paternalism

Kyklos, Forthcoming.

25 Pages Posted: 23 Feb 2015 Last revised: 25 Oct 2015

Jan Schnellenbach

BTU Cottbus-Senftenberg, Institute for Economics, Chair for Microeconomics; Walter Eucken Institute

Multiple version iconThere are 2 versions of this paper

Date Written: October 23, 2015

Abstract

Using a framework that distinguishes short-term consumer preferences, individual reflective preferences and political preferences, we discuss from a constitutional economics perspective whether individuals find it in their common constitutional interest to endow representatives and bureaucrats with the competence to impose soft paternalist policies. The focus is specifically on soft paternalist policies, because these often work with non-transparent "nudges" that are considered as manipulative in some contributions to the literature. We show that those soft paternalist policies that are manipulative indeed collide with three criteria of consumer sovereignty, reflective sovereignty and citizen sovereignty that can be argued to represent common constitutional interest of citizens. On the other hand, we argue that the set of paternalist policies that is deemed acceptable on the constitutional level is restricted to non-manipulative instruments, and their application as government policies is limited to cases with stable and very homogenous preferences. However, we also argue that competitive markets are capable of supplying many mechanisms that allow individuals to cope with problems in their decision-making processes on a private level.

Keywords: nudge, biases, autonomy, consumer sovereignty, reflective preferences, behavioural policies

JEL Classification: D11, D18, D63, D83, H11, Z18

Suggested Citation

Schnellenbach, Jan, A Constitutional Economics Perspective on Soft Paternalism (October 23, 2015). Kyklos, Forthcoming.. Available at SSRN: https://ssrn.com/abstract=2568410 or http://dx.doi.org/10.2139/ssrn.2568410

Jan Schnellenbach (Contact Author)

BTU Cottbus-Senftenberg, Institute for Economics, Chair for Microeconomics ( email )

Erich-Weinert-Str. 1
Cottbus, 03046
Germany

HOME PAGE: http://https://www.b-tu.de/fg-vwl-mikro/team/prof-dr-jan-schnellenbach

Walter Eucken Institute ( email )

Goethestr. 10
Freiburg, 79100
Germany

HOME PAGE: http://www.eucken.de

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