Herbert Simon’s Theory Of Bounded Rationality Essay

This example is successful in demonstrating that politicians are utility-maximisers because, as Downs (2011) explains, it perhaps explains why they choose to act, or in this case “formulate to win elections, rather than winning elections to formulate policies” (Downs, 1957: 28). A plausible reason is that the reward, or end benefits, provides an incentive to do something.

Although the opposing scholarship does not seem to challenge the definition of rationality per se or the view that individuals intentionally seek to maximise their utility, Herbert Simon’s theory of Bounded Rationality does however confront the realism of the individual’s ability to maximise their utility; arguing that realistically they are only able to achieve satisfactory outcomes, due to a number of limitations that the rational approach fails to consider.

Fundamentally, Simon refutes the central assumptions of the rational individual when decision-making on the basis that it is grounded on unrealistic beliefs in real-world context (Gigerenzer and Selten, 2002:16). This provides a significant challenge to the rational approach because to act rationally and maximise-utility, it means to hold a full baseline of information, adequate time and anticipate the consequences of decision-making whilst in the present (Forester, 1984: 24). Hence this perhaps demands more of human behaviour than it can realistically deliver. Simon modifies the approach to fit within a real-world context.

He asserts policy-actors are instead ‘bounded’, or simply restricted, by limitations and as such do not have inadequate time, knowledge, resources and information (Forester, 1984: 24). This argumentation provides a compelling view that policyactors are therefore incapable of maximising their utility, because the bounds to which they are constraint restricts their intellectual capacity to behave rationally. Simon argues they instead ‘satisfice’, or simply seek a ‘satisfactory’ or ‘good enough’ solution – wherein they adapt and make the best decision under the circumstance (Gigerenzer and Selten, 2002: 103).

Simon therefore does not reject rationality per se, but sympathises with it. C. SELF-INTEREST Another leading yet contentious assumption, within rational choice scholarship, is that of self-interest; commonly explaining that individuals hold a desire to serve their own interests and welfare (Kraft and Furlong, 2013: 82). Although widely demonstrated within rational policy-making, it is refuted by the opposing scholarship, as it is argued “individuals are not always single-minded pursers of their own self-interest” (Kraft and Furlong, 2013: 83).

This means an individual’s pursuit may not serve their own interest per se, but that of others. This viewpoint seems moderately plausible, considering the welfare economics paradigm – specifically from the logic of Adam Smith’s (1776) metaphor of the ‘Invisible Hand’. It explains that when the individual tries to maximise their own good, their actions promote society and benefit the wider public (Bishop, 1995: 165-170). As a hypothesis for counter-argumentation, it is attractive because it shows individual pursuits are instead guided to serve the common good instead of one’s own interests.

However it is conceivable that this criticism is misguided because it fails to appreciate the possibility that this assumption holds multiple distinctions of meaning. Shepsle and Bonchek (1997) propose that self-interest “may not necessarily indicate selfishness in the ordinary sense of the word” (Cairney, 2012: 137), as rational actors may also act egotistically rather than egoistically to satisfy their preferences. Dowding and King (1995) suggests this means individuals have the ability to act in a self-centred manner than one representing selfishness, which may reflect an act of charity or solidarity (Cairney, 2012: 137).

This is a compelling argument because it expands the meaning of self-interest within the borders of rationality; permitting the rational actor to pursue their own self-interest to satisfy their preferences, without concern for whom it benefits. Therefore it is credible that this assumption is accurate because as long as rationality was observed in the process, in this case the intention of serving one’s own interest, it renders irrelevant whom the act benefited (Elster, 2000:9).

Limitations and Criticisms This section considers the limitations and core criticisms levied against rational approach to policy-making. Although numerous have already been examined, such as Simon’s bounded rationality; Kahnerman prospect theory and Adam Smith’s ‘Invisible Hand’, this section examines further assessments within the opposing scholarship.

A. INCREMENTALISM.  The most prominent argumentation against the rational approach is provided by Charles E. Lindblom (1959) and his pioneering article ‘The Science of Muddling Through’, who builds upon Simons ‘bounded-rationality’ to examine flaws within the process of policy-making. At the centre of his argument, Lindblom proposes that, given the bounds to which policy actors are limited, they are prevented from establishing comprehensive changes to existing policies (root method); but instead adapt by “muddling through” by applying small incremental changes to existing policies (branch method) (Lindblom, 1959: 79-85).

Lindblom’s assertion arguably presents a more realistic perception of the policy-making process because firstly, It does not proceed in overestimating the intellectual capabilities of the individual as it considers the their mental limitations, as hypothesised by Simon (1957), in the realworld. Secondly, by embarking on a modality of “successive limited comparisons” – whereby there is no separation of means and ends, it provides a continuous process for providing new knowledge and potential outcomes; thus reducing the risk of making a mistake (Hill and Varone, 2014: 165).

For example, policy changes towards the United States National Strategy for Counter-terrorism are devised from successive evaluation of previous policies from preceding publications. This allows previous policies to be evaluated against its success but also against new objectives, such as: focus on new targets and geographical locations. This is where Lindblom deviates from bounded rationality. Lindblom argues that, as bounded rationality assumes the policy-actor is capable to differentiate between means and ends, it offers a “limited and narrow” perception of the policymaking process (Lindblom, 1959: 83).

This is a reasonable because, by modelling the policy process as a series of isolated assessments instead as continuous cycle, it is susceptible to mistakes – due to the lack of constant re-evaluation of previous policies. Moreover the sequential process of rational approach may not consider the realism that objectives may change throughout the process – highlighting its inflexibility. However ‘Incrementalism’ does accentuate a significant drawback.

Dror (1964) argues that incremental policy-changes prevents original policies from being made therefore “limiting social scientists’ ability to serve as sources of innovation” (Dror, 1964: 153-155; Gurtoo and Williams, 2015: 84). Although a credible assertion, Dror does not consider the possibility that it could entice conflict between rational policy-actors; whereas a key strength of incremental-model see’s it avoid conflict as policy-change is grounded on previous knowledge and assumptions.

C. EMPIRICAL VALUE – A leading criticism within the opposing scholarship pertains to Green and Shapiro’s (1994) assertion that the rational approach lacks empirical value and usefulness towards policy-making process (Cox, 1999). This is an arguable claim because rational choice models do not postulate any essence of knowledge about the way society functions. Unlike alternative behavioural approaches, the rational approach neglects important factors that facilitates a wider understanding of society, such as: culture, traditions and norms.

Therefore it offers a deductive approach based on theory, or simply an a priori argument; possibly forfeiting its empirical value at the cost of holding preferences and beliefs (Ishiyama and Breuning, 2010: 455). Considering it lacks realism and empirical value, proponents of rational approach, such as Milton Friedman (1953), disagree that it is useless by arguing “theories should be judged in terms of their predictive success rather than the realism of their assumptions” (Hindmoor, 2011: 194).

This indicates it’s worth is perhaps not in its ability to explain the reality of policy-making, but its ability as an ‘explanatory scope’ (Hindricks, 2008) for deducing new conclusions. This is plausible because by viewing the rational approach as a “heuristic tool” (Lane, 2006), it can provide quick “short-term falsifiable predictions” (Cairney, 2012: 16); although it would mean straying away from its original purpose. Although this defence only provides partial answer to Green and

Shapiro’s (1994) core argument, it is perhaps possible that they suitably select their criticism of rational choice and fail to assess different approaches to measure strengths and weaknesses (Marsh and Stoker, 2010: 55). Alternative Paradigms. The abovementioned argumentation leads to the possibility that alternative paradigms within public policy could be more successful in explaining the reality of the policy-making process.

Social constructivism offers an approach that argues behaviour s enthused by social constructs such as ideas and norms (Parsons, 2010: 80) but not by self-interest (Berger and Luckmann, 1966). It is possible that it presents a more thorough understanding of the policy-making process, because it considers and explains factors affecting individual behaviour – such as culture, history, interdependency. As it follows a holistic approach; whereby society as a whole can be used to explain individual behaviour (Onuf, 1989), it keeps developing to explain the changing reality of policy-making.