Hostname: page-component-8448b6f56d-wq2xx Total loading time: 0 Render date: 2024-04-18T08:24:44.363Z Has data issue: false hasContentIssue false

Behavioural public policy: the constitutional approach

Published online by Cambridge University Press:  06 October 2017

SHAUN P. HARGREAVES HEAP*
Affiliation:
King's College, London, UK
*
*Correspondence to: Shaun P . Hargreaves Heap, King's College, London, UK. Email: s.hargreavesheap@kcl.ac.uk

Abstract

One interpretation of the evidence on how people actually behave is that they sometimes/often do not have well-defined preferences. Although this makes public policy based on preference satisfaction problematic, it does not count against policy intervention per se. This paper argues instead that it shifts the object of intervention to the rules that constrain and enable action (away from the outcomes arising from those actions). This is the constitutional approach to public policy. Drawing on the constitutional tradition in political theory that values individuals for their individuality, the paper develops an argument for a basic income and a constitutionally constrained tax system. The key feature of this system is its simplicity. This should appeal on behavioural grounds to anyone who is concerned with using the tax and benefit system in public policy and not just those who are persuaded by the argument here for the constitutional approach to public policy.

Type
Articles
Copyright
Copyright © Cambridge University Press 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Brennan, G. and Buchanan, J. (1985), The Reason of Rules: Constitutional Political Economy, Cambridge: Cambridge University Press.Google Scholar
Butler, E. (2012), Public Choice: A Primer, London: IEA.Google Scholar
Falk, A. and Kosfeld, M. (2006), ‘The hidden costs of control’, American Economic Review, 96(5): 16111630.CrossRefGoogle Scholar
Frey, B. and Stutzer, A. (2002), ‘What can economists learn from happiness research?’, Journal of Economic Literature, XL: 402435.CrossRefGoogle Scholar
Halpern, D. (2015), Inside the Nudge Unit, London: W.H. Allen.Google Scholar
Hargreaves Heap, S. (2013), ‘What is the meaning of behavioural economics?’, Cambridge Journal of Economics, 37(5): 9851000.CrossRefGoogle Scholar
Hayek, F. (1960), The Constitution of Liberty, London: Routledge and Kegan Paul.Google Scholar
Kahneman, D. (2003), ‘Maps of bounded rationality’, American Economic Review, 93(5): 14491475.CrossRefGoogle Scholar
Kahneman, D. and Tversky, A. (1979), ‘Prospect theory: an analysis of decisions under risk’, Econometrica, 47(2): 263291.CrossRefGoogle Scholar
Mill, J. S. (1859, 1989), On Liberty and Other Writings, (edited Collini, S.). Cambridge: Cambridge University Press.Google Scholar
Mirrlees Review. (2011), Tax by Design, Oxford: Oxford University Press.Google Scholar
Mundell, R. (1968), International Economics, New York: Macmillan.Google Scholar
Nozick, R. (1974), Anarchy, State and Utopia, New York: Basic Books.Google Scholar
OECD. (2015), In it Together: Why Less Inequality Benefits All. Paris: OECD.Google Scholar
Rawls, J. (1971), A Theory of Justice, Cambridge: Belknap.CrossRefGoogle Scholar
Simon, H. (1978), ‘Rationality as process and product of thought’, American Economic Review, 68(2): 116.Google Scholar
Slovic, P. (1995), ‘The construction of preference’, American Psychologist, 50: 364371.CrossRefGoogle Scholar
Stewart, N. (2009), ‘Decision by sampling: The role of the decision environment in risky choice’, The Quarterly Journal of Experimental Psychology, 62(6): 10411062.CrossRefGoogle ScholarPubMed
Stigler, G. and Becker, G. (1977), ‘De gustibus non est disputandum’, American Economic Review, 67(2): 7690.Google Scholar
Sugden, R. (2009), ‘On Nudging: A Review of Nudge: Improving Decisions About Health, Wealth and Happiness by Richard H. Thaler and Cass R. Sunstein’, International Journal of Economics and Business, 16(3): 365373.CrossRefGoogle Scholar
Sunstein, C. and Thaler, R. (2008), Nudge: Improving Decisions about Health, Wealth and Happiness, Yale University Press.Google Scholar
Tinbergen, J. (1952), The Theory of Economic Policy, Amsterdam: North Holland.Google Scholar