Public Policy Theories: Homo Economicus Government or Benevolent Despot?
Posted: 8 Apr 2014
Date Written: April 7, 2014
I survey classical and Keynesian theoretical frameworks and explain their general suggestions for public policies. I classify Classical Political Economy, Ordoliberalism, and New Political Economy as theoretical concepts that suggest rule of law as institutional framework that allows the emergence of private enterprises, and Keynesian, Post-Keynesian, and Neo-Keynesian theoretical concepts that suggest interventionist public policies as correction of market failure. I argue that while Keynesian theoretical frameworks assume government behaving as neo-classical homo economicus classical theoretical frameworks assume government behaving as benevolent-despot. I conclude that benevolent-despot behavior of government is more realistic proposition than homo economicus.
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