With lawmakers seemingly still struggling to come up with solutions to the fiscal cliff dilemma (now only a day away from the cliff), I am reminded of this paper I ran across a while back by Niclas Berggren in the Review of Austrian Economics. Here is the abstract:
This study analyzes leading research in behavioral economics to see whether it contains advocacy of paternalism and whether it addresses the potential cognitive limitations and biases of the policymakers who are going to implement paternalist policies. The findings reveal that 20.7% of the studied articles in behavioral economics propose paternalist policy action and that 95.5% of these do not contain any analysis of the cognitive ability of policymakers. This suggests that behavioral political economy, in which the analytical tools of behavioral economics are applied to political decision-makers as well, would offer a useful extension of the research program. Such an extension could be related to the concept of robust political economy, according to which the case for paternalism should be subjected to “worst-case” assumptions, such as policymakers being less than fully rational.
That is precisely the problem with much of the behavioral economics research which advocates for policy action. This research typically finds people are not perfectly rational and then the researchers make a logical deduction that a paternalistic policy can make "irrational" people better off. But the vast majority of these studies never actually test how the people (for whom paternalism is supposedly needed) will respond to the choices or nudges made on their behalf or how political influences might affect the best-laid nudging plans.
I will note that for over a year now, I've been working on a couple papers with Bailey Norwood and Stephan Marette, which summarize the results of some experiments we ran in the US and France looking at how people respond to paternalistic food choices made for them. I'll write more about these studies when the papers are accepted for publication. For now, I'll reveal one finding, which isn't terribly surprising: people value the freedom to make their own choices.