Efficacious and Ethical Public Paternalism

Daniel M. Hausman in the Review of Behavioral Economics (Special Issue on Behavioral Economics and New Paternalism): “People often make bad judgments. A big brother or sister who was wise, well-informed, and properly-motivated could often make better decisions for almost everyone. But can governments, which are not staffed with ideal big brothers or sisters, improve upon the mediocre decisions individuals make? If so, when and how? The risks of extending the reach of government into guiding individual lives must also be addressed. This essay addresses three questions concerning when paternalistic policies can be efficacious, efficient, and safe: 1. In what circumstances can policy makers be confident that they know better than individuals how individuals can best promote their own well-being? 2. What are the methods governments can use to lead people to make decision that are better for themselves? 3. What are the moral pluses and minuses of these methods? Answering these questions defines a domain in which paternalistic policy is an attractive option….(More)”.