The Heritability of Disequilibrium in Democracy

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In 1980, William Riker published one of the most important papers I think ever written in political science about the heritability of disequilibrium. So usually the story that we get about the lack of equilibrium in democratic politics is a derivation of the arrow theorem. And with all the profit and loss, pure profit and loss with all the warts, the system that we have now, which is not pure profit and Loss, is cronyism. Even then it's impossible.

Economist and political scientist Michael Munger of Duke University talks about industrial policy with EconTalk host Russ Roberts. Munger argues that in a democracy, the default outcome for industrial policy is crony capitalism--attempts to improve on that outcome either by appointing experts or eliminating cronyism are going to fail for political reasons. The conversation concludes with a discussion of the reliability of Munger's claim and what options are left for dissatisfied reformers.