Paternalism: Methodological Problems of an Economic Analysis

Abstract

As a matter of theory, paternalism draws attention to philosophical and methodological difficulties involved in the justification of the limitations on freedom of individual choice in market and non-market settings. After a brief overview of the conceptual and justificatory problems surrounding paternalism in moral and political philosophy, this paper analyses whether economic theory, in its current state possesses the analytical tools for assessing paternalism adequately. I discuss how economists refine their analytical tools and redefine the concept of paternalism in order to fit the latter in their own methodological framework. I will argue that if economic analysis should have an impact on rational debates on paternalistic legal policies, it should both reconsider its normative assumptions and rely more systematically on empirical research, especially on the psychology of human judgement and decision making. Philosophical and empirical insights both suggest that the issue of paternalism is an 'uncertain case.' Outright anti-paternalism should not be replaced by uncritical paternalism.

Keywords: paternalism, economic methodology, behavioural economics

JEL Classification: B41, D63