What leads to bad economic policy? Bryan Caplan writes,

On the conventional view—widely accepted by economists, pundits, and the man in the street—the public demands policies in its own best interest, but the political system ignores their wishes. Bastiat and Mises dispute both parts of this story. They assert that democratic competition effectively drives politicians to do what the people want, but to their collective misfortune, many popular beliefs about economics are systematically mistaken.

Caplan uses survey research to show that the public does in fact favor the policies that lead to government spending, regulation, and protectionism. See also my essay on Economics vs. Populism.

For Discussion. The conventional wisdom as Caplan describes it blames special interests for bad policies. The Mises-Bastiat view blames public beliefs. Are those explanations mutually exclusive?