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In an Imperfect World Policy Rules Cannot be Perfect Either: Letter

Aufsätze referiert extern - Web of Science

Gert G. Wagner

In: The Economists' Voice 19 (2022), 1, S. 81-85

Abstract

It is striking that economists in particular firmly believe in the benefits of rule-binding, even though this belief runs counter to the standard assumption of economic theory that we humans are self-interested and therefore extremely resourceful when it comes to circumventing inconvenient government regulations, e.g. taxes. In Public Choice Theory, politicians are even assumed to have nothing but self-interest as their guiding motive for action. Why then, in this world of thought, should ultra-self-interested politicians of all people adhere to simple rules such as the debt brake instead of bypass them, if – as is also assumed in this model world all that matters to them is short-term electoral success, for which government debt can be helpful.

Gert G. Wagner

Senior Research Fellow in the German Socio-Economic Panel study Department



Keywords: rule-binding; Champbell; Goodhart’s law; Hobbes
DOI:
https://doi.org/10.1515/ev-2021-0016

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