EconPapers    
Economics at your fingertips  
 

Ideology

Roland Benabou ()

No 13907, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I develop a model of ideologies as collectively sustained (yet individually rational) distortions in beliefs concerning the proper scope of governments versus markets. In processing and interpreting signals of the efficacy of public and market provision of education, health insurance, pensions, etc., individuals optimally trade off the value of remaining hopeful about their future prospects (or their children's) versus the costs of misinformed decisions. Because these future outcomes also depend on whether other citizens respond to unpleasant facts with realism or denial, endogenous social cognitions emerge. Thus, an equilibrium in which people acknowledge the limitations of interventionism coexists with one in which they remain obstinately blind to them, embracing a statist ideology and voting for an excessively large government. Conversely, an equilibrium associated with appropriate public responses to market failures coexists with one dominated by a laissez-faire ideology and blind faith in the invisible hand. With public-sector capital, this interplay of beliefs and institutions leads to history-dependent dynamics. The model also explains why societies find it desirable to set up constitutional protections for dissenting views, even when ex-post everyone would prefer to ignore unwelcome news.

JEL-codes: D72 D83 H11 P16 Z1 (search for similar items in EconPapers)
Date: 2008-04
Note: EFG POL
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Published as R. Bénabou, “Ideology,” Journal of the European Economic Association, 6(2-3), (2008), pp. 321­352.

Downloads: (external link)
http://www.nber.org/papers/w13907.pdf (application/pdf)

Related works:
Working Paper: Ideology (2008) Downloads
Working Paper: Ideology (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:13907

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w13907

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-10-22
Handle: RePEc:nbr:nberwo:13907