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Tag: time-inconsistent preferences

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Jan 23, 2026
acx
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23 min 3,434 words 544 comments 207 likes podcast (19 min)
Scott analyzes why people support government-funded foreign aid instead of donating voluntarily, examining and critiquing several theories including virtue signaling, coordination problems, and time-inconsistent preferences. Longer summary
Scott examines why people support government-funded foreign aid rather than just donating directly, pushing back against the 'other people's money' argument. He considers and critiques several explanations: the force multiplier theory (seizing opponents' money), virtue signaling through voting, psychological free-riding on knowing problems are solved, coordination problems requiring bundling, transaction costs that make voluntary systems impractical, and time-inconsistent preferences where people's long-term values differ from their moment-to-moment impulses. Scott concludes by proposing a thought experiment where tax forms include an opt-out box for foreign aid, predicting most people wouldn't use it, suggesting the issue is more complex than simply wanting to spend others' money. Shorter summary
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