NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Ideology

Roland Bénabou

NBER Working Paper No. 13907
Issued in April 2008
NBER Program(s):   EFG   POL

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.

download in pdf format
   (579 K)

email paper

This paper is available as PDF (579 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13907

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

Users who downloaded this paper also downloaded these:
Benabou and Tirole w17579 Laws and Norms
Benabou Inequality and Growth
Brunner, Ross, and Washington w14091 Economics and Ideology: Causal Evidence of the Impact of Economic Conditions on Support for Redistribution and Other Ballot Proposals
Benabou w14764 Groupthink: Collective Delusions in Organizations and Markets
Alesina, Cozzi, and Mantovan w15587 The Evolution of Ideology, Fairness and Redistribution
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us