A Constitutional Economics Perspective on Soft Paternalism

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.In diesem Papier wird untersucht, ob und in welchem Umfang paternalistische politische Maßnahmen gerechtfertigt werden können, sofern diese nicht mit klaren Regeln arbeiten, sondern Schwachpunkte individueller Entscheidungsprozesse nutzen, wie sie aus der Verhaltensökonomik bekannt sind. Die zur Beurteilung herangezogenen Kriterien sind aus der verfassungsökonomischen Theorie abgeleitet. Im Ergebnis zeigt sich, dass der sogenannte 'weiche' Paternalismus nur in sehr seltenen Fällen verallgemeinerbaren Interessen der Bürger entspricht, nämlich dann, wenn seine Instrumente vollständig transparent und nicht manipulativ sind, sowie die Entscheidungsautonomie des Einzelnen gewahrt bleibt

Does classical liberalism imply an evolutionary approach to policy-making?

This paper argues that an evolutionary approach to policy-making, which emphasizes openness to change and political variety, is particularly compatible with the central tenets of classical liberalism. The chief reasons are that classical liberalism acknowledges the ubiquity of uncertainty, as well as heterogeneity in preferences and beliefs, and generally embraces gradual social and economic change that arises from accidental variation rather than deliberate, large-scale planning. In contrast, our arguments cast doubt on a different claim, namely that classical liberalism is particularly compatible with the evolutionary biological heritage of humans

Decentralization as a Disincentive for Transnational Terror? An Empirical Test

Using panel data for a maximum of 109 countries over the years 1976-2000, we empirically analyze the impact of decentralization on the occurrence of transnational terror. Taking account of the potential simultaneity between terror and decentralization, our results show that expenditure decentralization robustly reduces the number of terror events in a country, while political decentralization has no impact