January 7, 2013

Rational Irrationality and the Political Process of Repeal

The Women's Organization for National Prohibition Reform and the 21st Amendment
  • Diana Thomas

    Associate Professor of Economics, Creighton University
  • Nick Snow

  • Michael D. Thomas

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The theory of rational irrationality suggests that voters are biased and do not face sufficient incentives to choose rationally; instead they vote for various private reasons. As a result, socially and economically destructive policies can receive widespread public support. Furthermore, because there is no private benefit of learning from experience, such policies can persist over time. We argue here that despite this otherwise dismal outlook on public policy, the theory of rational irrationality leaves two avenues for economically sensible reform: First, when the ex post costs of irrationality are higher than expected, rationally irrational voters will reduce their consumption of irrationality and demand more rational policies. Second, rationally irrational voters can be convinced to rationally update their policy preferences through the use of appealing rhetoric and persuasion by experts. We discuss these two avenues for reform using the example of the repeal of the 18th amendment, which, as we will show, relied on both updating as well as persuasive campaigning.

Find the full article at Wiley Online Library.