In an Imperfect World Policy Rules Cannot be Perfect Either

Gert Wagner

The Economists' Voice, 2022, vol. 19, issue 1, 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.

Keywords: rule-binding; Champbell; Goodhart’s law; Hobbes (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1515/ev-2021-0016

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