When Ideas Trump Interests: Preferences, Worldviews, and Policy Implications

DANI RODRIK
JOURNAL OF ECONOMIC PERSPECTIVES 28.1 (2014): 189-208

Abstract: Ideas are strangely absent from modern models of political economy. In most prevailing theories of policy choice, the dominant role is instead played by “vested interests”—elites, lobbies, and rent-seeking groups which get their way at the expense of the general public. Economists, political scientists, and other social scientists appeal to the power of special interests to explain key puzzles in regulation, international trade, economic growth and development, and many other fields…While hidden assumptions play a role in all economic models, I will argue that the failure to recognize the role of ideas in shaping interests (and their pursuit) has especially serious implications in political economy. Taking ideas into account allows us to provide a more convincing account of both stasis and change in political-economic life.