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

The paper mapping from "interests" to outcomes in political economy depends on many unstated assumptions about the ideas that political agents have about: what they are maximizing; how the world works; and the set of tools they have at their disposal to further their interests. These ideas are subject to both manipulation and innovation, making them part of the political game. There is a direct parallel, as I will show, between inventive activity in technology and investment in persuasion and policy innovation in the political arena. I focus specifically on models professing to explain economic inefficiency.