So If Incentives Are Overrated…
New Nobelists Duflo and Bannerjee in the NYT:
[E]conomists have somehow managed to hide in plain sight an enormously consequential finding from their research: Financial incentives are nowhere near as powerful as they are usually assumed to be.
David's critique is excellent. But supposing Duflo and Bannerjee are right, I have a few questions.
If incentives are overrated…
1. Is it OK to reduce penalties for tax evasion?
2. Is it OK to cut regulatory enforcement?
3. Is it OK to curtail the right to sue?
4. Is it OK to cut pay and benefits for government employees?
My underlying point, as I've said before: The connection between heterodox economics and left-wing policies is fragile at best.
Yes, "incentives matter" helps the case for some right-wing policies. But "incentives matter" also helps the case for some left-wing policies. If you think textbook economics is misleading - as I often do - you should do a full rethinking of your policy views. Don 't just single out the policies you dislike because they rest on questionable assumptions. Scrupulously investigate the implications for policies you like, too.
What if the heterodox assumptions turn out, on balance, to be politically inconvenient for you?
Perhaps you went heterodox a little too hastily.
Or perhaps reality just isn't politically convenient.
The post So If Incentives Are Overrated… appeared first on Econlib.
作者暂无likerid, 赞赏暂由本网站代持，当作者有likerid后会全部转账给作者（我们会尽力而为）。Tips: Until now, everytime you want to store your article, we will help you store it in Filecoin network. In the future, you can store it in Filecoin network using your own filecoin.
Support author:
Author's Filecoin address:
Or you can use Likecoin to support author: