Online library entry

Rodrik D. (2014) When Ideas Trump Interests: Preferences, Worldviews, and Policy Innovations, Journal of Economic Perspectives 28(1): 189-208.


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Summary:

Rodrik argues in favour of a renewed focus on ideas as key in defining interests and, as such, they can be used to relax political constraints.

Political economy analysis emphasises above all else the importance of “vested interests.” Rodrik agrees that interests are a necessary element of any analysis, but he challenges the notion that there is a well-defined or fixed link between “interests” and outcomes. Rather, he argues that “interests” themselves must be interpreted and re-interpreted. How political actors understand what serves their interests, how the world works and the set of tools they have to meet their goals all depends on a certain set of ideas, which can change.

This observation has important implications for policy-making, and ultimately for development. Rodrik argues that once their fluid nature is recognized, vested interests become much less determining and the space of possible outcomes widens. Using examples including South Korea and China, Rodrik observes that reform often happens not when vested interests are defeated, but when different strategies are used to pursue those interests or when interests themselves are redefined.