Kydland and Prescott identified time inconsistency as inherent to democratic policymaking.

Evidence

The telling contribution here came from two economists associated with the Real Business Cycle school, Edward Prescott and Finn Kydland. They pointed out that even if we don’t assume that politicians are instrumentalist to the core, caring not a fig for the country as a whole, and assume instead the best of intentions, a “time inconsistency” problem sits at the heart of democratic decision making. Time inconsistency is familiar to any smoker who wants to quit: “really, just one more, and then I will stop.” Politicians are time inconsistent insofar as they may sincerely promise to, for example, tackle the debt or lower inflation, but when a shock happens to the economy and/or an election looms, other priorities get in the way, and they renege on their promises; hence, inflation. — Mark Blyth, Austerity, 421

Categorization

• DEFINE: Clear, concrete definition of the time-inconsistency concept that becomes foundational to the central-bank-independence movement.
• XREF: The smoking analogy and the concept connect to public-choice and rational-expectations literature Blyth traces elsewhere; relevant to Mattei’s intellectual-history framing.