Behavioral concepts as part of a participative political economics perspective

Abstract

Behavioral economics tends to be seen as a new and separate branch of economics comparable to environmental economics, health economics and even public choice theory. This version of behavioral theory is mainly trying to test hypotheses about human behavior in various ways. It will here be argued that taking various behavioral concepts seriously (as was done at an early stage by Herbert Simon for example) will lead us to a new understanding of human beings and be part of a microeconomics different from that of mainstream neoclassical theory. A political economics person (PEP) is proposed as a more open alternative to Homo Oeconomicus. A political economic organization (PEO) will similarly replace the firm exclusively focusing on monetary profits and markets will be understood in terms of PEPs and PEOs as market actors. The political element suggests that issues of ideology, ethics, and responsibility are relevant and this is so also for natural resource, ecosystem, and other sustainability issues. The ideological orientation of an actor is something to be investigated in each case suggesting that it is not so meaningful to look for a general theory of behavior applicable to some average person or all individuals. To bring value issues to the forefront I have recently suggested that "economics" is defined as "multidimensional management of resources in a democratic society". Resources should be understood as multidimensional, i.e., monetary and non-monetary, where the reduction of all kinds of non-monetary impacts to their alleged monetary equivalents is not considered very meaningful. Positional analysis is proposed as an alternative to cost-benefit analysis (CBA) and institutional change is looked upon as matter of understanding the behavior and actions of PEPs and PEOs (processes of legitimation, manifestation etc.) Inertia (lock-in effects, commitments, path dependence, irreversibility) is characterizing institutional change processes as well as estimates of policy and project impacts in decision situations.