Working Paper: NBER ID: w23587
Authors: Matthew Weinzierl
Abstract: I propose and formalize an argument for why economists working in the welfarist normative tradition should include nonwelfarist principles in how they judge economic policy. The key idea behind this argument is that the world is too complex, and our ability to model it too limited, for us to fully trace a policy's effects on welfare. Nonwelfarist principles can be valuable to a welfarist facing this limitation if they act as informational proxies, carrying accumulated knowledge about the effects of policy that otherwise cannot be considered. This argument can be seen both as extending a familiar logic for rule utilitarianism beyond the realm of individual ethics and as a specific version of a broader argument made for centuries by theorists from Hume to Hayek. I also provide evidence of an example in which real-world policy judgments are consistent with this theoretical argument. Results from a novel U.S. opinion survey show that approximately half of respondents reject redistribution driven by envy even though it generates direct utilitarian gains. That share rises as the role of envy is made more salient, consistent with respondents using nonwelfarist principles to encode concerns about the unobservable consequences of policy.
Keywords: Welfarism; Nonwelfarist Principles; Policy Analysis; Envy; Redistribution
JEL Codes: D61; H21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| nonwelfarist principles (D69) | welfarist policy evaluations (I38) |
| nonwelfarist principles (D69) | better policy design (D78) |
| public skepticism towards envy-based redistribution (D63) | negative welfare implications (D62) |
| nonwelfarist principles (D69) | public policy preferences (J18) |
| public opinion (D72) | rejection of envy-based redistribution (D63) |
| nonwelfarist principles (D69) | mitigate negative externalities associated with envy (D62) |