Abstract
Brennan and Hamlin provide a normative justification for dispositional conservatism based on the concave value functions which give rise to quasi-risk aversion. This note modifies this argument for “analytic conservatism” by allowing jurisdictional exit in response to institutional decline. By providing a welfare floor which limits the cost of failure, exit reverses the normative implications of Brennan and Hamlin’s argument, making risk-neutral agents quasi-risk seeking and justifying a radical disposition to reform under some circumstances.
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Notes
On political dispositions, see generally Hamlin (2006).
Brennan and Buchanan’s (1981, 1983, 1985, pp. 54–59) earlier arguments for systematically pessimistic assumptions regarding human nature for comparative institutional analysis are logically similar to Brennan and Hamlin’s argument for analytic radicalism. My use of the term “quasi-risk aversion” comes from Brennan and Buchanan (1985, p. 54).
An agent has convex preferences over some set of goods if averages are preferred to extremes. More precisely, preferences are convex in case any bundle which is a weighted average of two bundles on the same indifference curve is at least at valued as either of the original bundles.
Brennan and Hamlin contrast conservatism with “idealism.” I avoid that term here because their conceptualization of idealism is focused very much on a desire to reach some ideal point rather than on institutional change generally. An acceptable alternative to “radicalism” for my purposes would be “progressivism.”
For example, indivisibilities in consumption can produce increasing marginal utility of income over certain ranges where a continuous function would produce uniform diminishing returns. This might explain the allegedly irrational practice of simultaneously buying lottery tickets and insurance (Friedman and Savage 1948; Kwang 1965).
People move for many reasons, but institutional factors do seem to be a factor in locational decisions. See Dowding et al. (1994) for an overview of the empirical evidence.
Becker and Posner (2005) use similar logic to explain apparently risk-seeking behaviour on the part of the extremely poor and unhappy, with the option of suicide providing a welfare floor.
It’s important to note that such preferences are massively over-determined and that an efficiency justification is not necessarily a causal explanation.
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Acknowledgments
I thank Geoffrey Brennan, Keith Dowding, Patri Friedman, Michael Miller, the editors, and an anonymous reviewer for their comments and suggestions. The usual discalimer applies.
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Taylor, B. Analytic radicalism. Const Polit Econ 24, 166–172 (2013). https://doi.org/10.1007/s10602-013-9134-y
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DOI: https://doi.org/10.1007/s10602-013-9134-y