The Dahrendorf Hypothesis and its Implications for the Theory of Economic Policy

Abstract

The sociologist R. Dahrendorf has recently suggested that there is no and there ought to be no convergence of economic policies towards some common ideal model. On the contrary, he states that diversity is [...] at the very heart of a world that has abandoned the need for closed, encompassing systems. It is shown in this paper that the Dahrendorf hypothesis is difficult to reconcile with orthodox economic approaches to economic policy-making. A perspective on policy-making that introduces either fundamental uncertainty or endogenous policy preferences or both is, however, shown to be consistent with the Dahrendorf hypothesis.

Keywords: Diversity, Evolutionary political economy, Economic policy-making

JEL Classification: B52, D72, D78