CHANNELING IDEOLOGICAL CHANGE - THE POLITICAL-ECONOMY OF DEPENDENCE ON GOVERNMENT

This paper is concerned with two aspects of the process of ideological change: endogenously manipulable political transaction costs and depe ndence on government. Building on economic models of ideological evolu tion that suggest the self-validating nature of institutional change, this paper analyzes a complementary process that facilitates instituti onal changes initially incompatible with people's beliefs. Self-intere sted reshaping of political transaction costs and creation of dependen ce on government are seen as mechanisms that support institution-legit imating ideological transformation. The evolution of Social Security's compulsory old-age insurance in the U.S. is used to illustrate releva nt processes of institutional and ideological change.