Why Paternalism?
Robin Hanson (hanson@econ.berkeley.edu)
Tue, 18 Nov 1997 11:15:41 -0800
I'm a postdoc in health policy, and a main research area of mine
is understanding regulatory paternalism, where governments don't
seem to trust people to make their own choices, even when most of
the consequences of those choices are personal.
Some abstracts of some of my work on the topic are included below.
I'm interested in what others here think of what explains paternalistic
behavior, by both governments and actual parents. Why do parents
forbid their children (over 10) from driving, sex, drugs, etc., rather
than just giving advice? And is the reason governments act similarly
toward adults any different?
-------------------------------------------------------------
"Warning Labels as Cheap Talk: Why Regulators Ban Products"
Regulators ban many products, via professional licensing,
safety codes, and required approval of food, drugs, and
securities. But if bans are to protect uninformed consumers, why
don't regulators just require warning labels? And if bans are
hidden regulatory capture, what do voters think bans are for?
A careful analysis of fully rational but ignorant consumers and
ideally motivated rational regulators, however, predicts high
rates of product bans. Warning labels are cheap talk, so
weak regulator incentives to lie (such as to correct for
market failures) induce strong consumer skepticism about
regulator advice. Expecting the worst products to be banned,
consumers will simply not believe severe warnings.
Consumers will interpret warning labels differently if a
regulator is not allowed to ban a product. There are cases where
this change reduces consumer welfare, but for an identified
general class of cases, consumer welfare improves. Thus product
bans can be seen as a commitment failure, a loss due to an
inability to commit not to ban.
-------------------------------------------------------------
"The Paternalism Trap: Why Constitutional Liberalism is Rare"
In a previous paper, I described how product bans can be viewed
as commitment failures. While everyone can be better off when
regulators are prohibited from banning products, consumers who
know bans are possible discount warning labels, inducing regulators
to ban often.
In this paper, I model a government which attempts to commit to
a liberal regime where bans are not allowed, by imposing costs on
"constitutional" change. Delays in the adjustment of consumer
expectations, however, reduce the short-term benefits of this attempt
and increase the temptation to later return to paternalistic bans.
Consumer skepticism regarding the longevity of liberalism strengthens
this temptation. When governments with a long-term view are rare,
paternalism becomes the rule and liberalism the exception.
-------------------------------------------------------------
--
Robin Hanson
hanson@econ.berkeley.edu http://hanson.berkeley.edu/
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614