TY - JOUR
T1 - Evolution, uncertainty, and the asymptotic efficiency of policy
AU - Albrecht, Brian C.
AU - Hendrickson, Joshua R.
AU - Salter, Alexander William
N1 - Publisher Copyright:
© 2022, The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.
PY - 2022/7
Y1 - 2022/7
N2 - Politics, like any social system, involves selection mechanisms. This paper presents a model of politics as an evolutionary process. Our model yields three main results. First, the political process selects for efficient policies in the long run. We call that attribute asymptotic efficiency. Second, bargaining amongst interest groups bounds the inefficiencies that can exist in the short run. Potential inefficiency declines when organizing interest groups becomes less costly. Finally, policies that appear to be inefficient in a static analysis can be efficient once economists consider the dynamic nature of political decisions. We argue that viewing the political process as a selection mechanism allows political economists to use efficiency as a criterion for positive economic analysis. In our approach, applied political economy involves looking for relevant costs that make the policy efficient. However, our approach does not rob political economists of the ability to make meaningful normative statements; it only constrains the type of statements made.
AB - Politics, like any social system, involves selection mechanisms. This paper presents a model of politics as an evolutionary process. Our model yields three main results. First, the political process selects for efficient policies in the long run. We call that attribute asymptotic efficiency. Second, bargaining amongst interest groups bounds the inefficiencies that can exist in the short run. Potential inefficiency declines when organizing interest groups becomes less costly. Finally, policies that appear to be inefficient in a static analysis can be efficient once economists consider the dynamic nature of political decisions. We argue that viewing the political process as a selection mechanism allows political economists to use efficiency as a criterion for positive economic analysis. In our approach, applied political economy involves looking for relevant costs that make the policy efficient. However, our approach does not rob political economists of the ability to make meaningful normative statements; it only constrains the type of statements made.
KW - Alchian
KW - Efficiency
KW - Evolution
KW - Political Coase theorem
KW - Real options
UR - http://www.scopus.com/inward/record.url?scp=85131523346&partnerID=8YFLogxK
U2 - 10.1007/s11127-022-00978-2
DO - 10.1007/s11127-022-00978-2
M3 - Article
AN - SCOPUS:85131523346
SN - 0048-5829
VL - 192
SP - 169
EP - 188
JO - Public Choice
JF - Public Choice
IS - 1-2
ER -