My co-blogger's Myth of the Rational Voter has gotten well-deserved thumbs up from Greg Mankiw and Tyler Cowen. Tyler raises some issues, including
3. Voters are less irrational in many northern European countries. I don't agree with their socialistic view of the world, but in epistemically procedural terms they are making a much greater effort to get at the truth and put that truth into their vote. What accounts for such a difference?
4. Bryan comes dangerously close to agreeing with me on broad matters of politics. I think public opinion, for better or worse, is often a constraint on what is possible; that is why Henry Farrell described my view as "big government libertarianism." Bryan sees opinion as a variable to be manipulated, but he could equally well consider it as a constraint. His proposal to take more matters out of democratic hands begs the question of how this could be possible, given current public opinion.
I think that developed countries can survive a great deal of misguided policies. What is important is that we avoid succumbing to
Despotic Populism, as Alvaro Vargas Llosa aptly describes the tendencies in Latin America and Russia.
Voting for a large welfare state run by misguided but well-intended bureaucrats is unwise, in my opinion, but not hopelessly irrational. Voting to replace a broad-based democratic form of government with a caudillo and his cronies is so far outside the bounds of rationality as to be unfathomable.
UPDATE: more by Llosa on despotic populism here.
I'm sure you are aware of this, but just in case, Andrew Gelman has also posted comments on your book:
http://www.stat.columbia.edu/~cook/movabletype/archives/2007/04/the_myth_of_the.html
One should put in perspective the concept of bounded rationality. If we were to consider that there exists something like bounded rationality everything explains itself. Even an illetrate person is rational, the only difference being that he is bounde rational on the knowledge that he has. However, viewed from the view of economist and intellectual like Kaplan and King, he would be considered irrational. Even Caplan and King are arguing based on bounded rationality and would possibly be cosidered irrational from the perception of a person with more knowledge them them, like say, GOD.
So GOD is a completely rational person, since he has complete knowledge and his decisions are based on complete knowledge and remeberence of complete facts of the case and all other inferiror mortals suffer from bounded rationality and are often perceived to be irrational by other mortal who disagree with thier view points.
raj, irrationality is completely different from ignorance. Here is Caplan's Rational Ignorance vs Rational Irrationality.
The voter correction cycle is long, so long that by the time the correction comes, voters have changed and are on to new problems.
In California we tried to correct this with term limits, which effectively shortens the voter correction cycle. All it created was shorter term thinking.
Ultimately the solution is like something we did with the federal reserve. We simply decided that monetary policy was too inmportant to leave it entirely to the voters, so we gave the bank semi-independence. This only partially corrected the problem of bank panics and we still suffer from the excesses of monopoly banking.
The key is to find a compromise, as we did with the fed, but apply this compromise to more the long standing government institutions.
"His proposal to take more matters out of democratic hands begs the question of how this could be possible"
Ever hear of something called the Supreme Court?