Pathological altruism and pathological regulation.

AuthorRubin, Paul H.
PositionReport

A concept recently developed by scholars in psychology and biology is "pathological altruism." (Oakley 2013, Oakley et al. 2012). A pathological altruist is defined as "a person who sincerely engages in what he or she intends to be altruistic acts, but who harms the very person or group he or she is trying to help, often in unanticipated fashion; or harms others; or irrationally becomes a victim of his or her own altruistic actions." (Oakley, Knafo, and McGrath 2012: 4). We may relate this concept to Buchanan's Samaritan's dilemma: Buchanan's Samaritan is the altruist, and the pathology is that the recipient will be in the "no work" cell, so that the Samaritan becomes a victim of his own altruistic actions (Buchanan 1975).

So far as I know, this concept has not yet been used in economics. However, it can become an extremely useful tool for economists, and particularly public choice economists. This is because there are many public policies that are harmful in one or more of the senses above, and yet which are supported by well-meaning citizens and voters. The notion of pathological altruism is by no means a complete explanation for undesirable special interest legislation or regulation. However, it can be a valuable additional tool in the economist's toolkit for explaining such legislation. This is because if an interest group can harness the altruistic beliefs of voters, it will be more successful in obtaining the benefits it desires. Because of voters' limited attention and understanding, the actual act may be pathological in the sense defined above, and yet still appeal to voters. Voters are likely to pay attention to motives, not results, if there is a plausible connection between the policy and the goal.

Psychologists have developed many sources of pathological altruism and used it to explain many behaviors. Many of these are not directly relevant for economic analysis. However, one source that has been identified is simply error: "When people who feel empathy at witnessing another's misfortunes falsely believe that they caused the other's problems, or falsely believe that they have the means of to relieve the person of suffering, they have erred in their analysis of the situation" (O'Connor et al. 2012: 11). O'Connor et al. also relate this notion to guilt about inequality, where those with more wealth feel guilty with respect to those who have less (p. 16). They explain this guilt in evolutionary terms, arguing that in the evolutionary environment equality was an important social value. This is similar to arguments I have made elsewhere (Rubin 2002, 2003).

While Oakley et al. (2012) present many examples of pathological altruism for individuals in their day-to-day lives, one would expect the notion to be highly relevant for policy analysis. This is because of the standard notion of "rational ignorance." If a policy can present a plausible altruistic justification, it generally does not pay for voters to further examine this basis. Moreover, policies are extremely difficult to analyze and even if voters desired to determine their effects, they would have a good deal of difficulty doing so. Knowledge of the effects of policies is not direct, but must be teased out of the data using statistical or econometric tools, and even then there is often disagreement among experts about the effects of policies. This disagreement is fueled by the incentives of participants in political debates to find or fund experts who will espouse their views. As a result, it would not be surprising if voters erroneously support counterproductive or pathologically altruistic policies.

The point is that policies need not actually benefit the purported beneficiaries. As long as a convincing story can be told about beneficiaries, the political process may adopt the policies. The notion of pathological altruism can be added to the public choice economist's standard notion of rational ignorance to create a powerful new tool for analysis.

There is another potential benefit from applying the notion of pathological altruism to economic behavior. Scholars in fields such as psychology and perhaps biology are generally more favorable disposed to regulation than are many economists. Many psychologists and others seem to already accept the notion of pathological altruism. One of the key papers was published in Science (Oakley 2013). If we economists can relate the notion of inefficient regulation to the notion of pathological altruism, we may be able to enlist some of these scholars in efforts to reform inefficient or undesirable regulation. Moreover, if we economists can point out that many regulations are a result of pathological altruistic processes, we may be able to gain allies in our attempts to eliminate inefficient regulations.

The Supply Side of Regulation

Since at least the important paper by Stigler (1971), economists studying regulation have focused on the demand side of regulation--that is, which industries have the political power to obtain the benefits of favorable regulation from the state. However, there is also a supply side. Certain forces make it easier for some industries to obtain regulation. In particular, there are characteristics of some industries that make it easier for the political process to regulate them. Understanding those characteristics will shed some light on the form of regulation for particular industries, and may also help suggest policies which can reduce inefficient regulation.

There are three fundamental political justifications for regulation: efficiency enhancement, altruism, and fear. Economists, of course, emphasize efficiency. However, efficiency does not have a large political constituency; most voters do not think in economic or efficiency terms (Rubin 2003, Caplan 2007). Indeed, even when there are efficiency justifications for some regulation (e.g., using antitrust to eliminate deadweight losses), political explanations are more likely to be in terms of altruistic redistribution--lowering prices for consumers (altruism), or taking away monopolists ill-gotten gains (fear). Since Stigler's article economists have tended to treat justifications for regulation as a detail, and to...

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