In a world with many targets, one-dimensional target indicators will always be bypassed

Arbeitspapier

It is striking that economists in particular firmly believe in the benefits of rule-binding, even though this belief runs counter to the standard assumption of economic theory that we humans are self-interested and therefore extremely resourceful when it comes to circumventing inconvenient government regulations, e.g. taxes. In Public Choice Theory, politicians are even assumed to have nothing but self-interest as their guiding motive for action. Why then, in this world of thought, should ultra-self-interested politicians of all people adhere to simple rules such as the debt brake instead of bypass them, if - as is also assumed in this model world - all that matters to them is short-term electoral success, for which government debt can be helpful.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 1982

Classification and Topics

• Classification: Wirtschaft ; History of Economic Thought through 1925: General ; History of Economic Thought since 1925: General ; Law and Economics: General ; Capitalist Systems: Political Economy
• Subject: rule-binding ; Champbell ; Goodhart's Law ; Hobbes

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Wagner, Gert G.
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/248485
• Last update: 10.03.2025, 11:41 AM CET