There is nothing wrong with the structural analysis, but I am much more (un) impressed by incorrect beliefs by both politicians and the publics about what "payoffs" are. I think his rather than equilibrium dynamics is the reason we do not have merit based immigration, low deficits, and taxation of net emissions of CO2.
Ideally, and to some extent it happens, we want voters to favor things that are for the common good even if they are a bit inconvenient for them personally just as we want legislators to vote for the common good even if its unpopular. The problem is that voters are often wrong about what is in the common good and everyone would be better off if they just correctly favored what was in their individual good.
Yup - the issue arises is when the individual mistake what is in their own interest, because they may misjudge what others would do. Certain policies only work if you assume that other people will act accordingly in their own self-interest. But if you believe otherwise, you may end up changing your own action.
I have been reading a bit of “Thinking Fast and Slow” and the propensity of laypeople to support policies that are irrational / not in their interests makes me wonder if human psychology is the primary force here.
Economics assume that people operate with perfect information (as you state) and behave rationally. Humans are capable of being rational, but often are not. This is a flaw of the political system; it doesn’t have a strong ability to correct these biases.
I proposed a new kind of parliament that tries to resolve this by bringing hundreds of laypeople together to evaluate policies in a “court-like” setting, giving them an opportunity to learn about a policy like a jury would. The peoples’ will would be balanced by another house, possibly filled with bondholders, who would have a long term, highly rational approach to policymaking, with the tension between to the two holding each in check: https://www.lianeon.org/p/imagining-our-martian-government
There is nothing wrong with the structural analysis, but I am much more (un) impressed by incorrect beliefs by both politicians and the publics about what "payoffs" are. I think his rather than equilibrium dynamics is the reason we do not have merit based immigration, low deficits, and taxation of net emissions of CO2.
Ideally, and to some extent it happens, we want voters to favor things that are for the common good even if they are a bit inconvenient for them personally just as we want legislators to vote for the common good even if its unpopular. The problem is that voters are often wrong about what is in the common good and everyone would be better off if they just correctly favored what was in their individual good.
Yup - the issue arises is when the individual mistake what is in their own interest, because they may misjudge what others would do. Certain policies only work if you assume that other people will act accordingly in their own self-interest. But if you believe otherwise, you may end up changing your own action.
I have been reading a bit of “Thinking Fast and Slow” and the propensity of laypeople to support policies that are irrational / not in their interests makes me wonder if human psychology is the primary force here.
Economics assume that people operate with perfect information (as you state) and behave rationally. Humans are capable of being rational, but often are not. This is a flaw of the political system; it doesn’t have a strong ability to correct these biases.
I proposed a new kind of parliament that tries to resolve this by bringing hundreds of laypeople together to evaluate policies in a “court-like” setting, giving them an opportunity to learn about a policy like a jury would. The peoples’ will would be balanced by another house, possibly filled with bondholders, who would have a long term, highly rational approach to policymaking, with the tension between to the two holding each in check: https://www.lianeon.org/p/imagining-our-martian-government
Yup - the example above does suggest that thinking in other people's shoes is not easy.