The relative importance of ideas and interests in shaping economic policy has been much debated. One influential position, associated with Dicey, argues that public policy in each age is shaped by general doctrines about the nature of a society and the role of government. Individualism, which dominated the nineteenth century, was supplanted by collectivism in the twentieth, only for collectivism in its turn to be challenged by the revival of doctrines of economic liberalism in the 1970s and 1980s. An alternative tradition, represented by both public choice and Marxism, rejects this account of the formation and the development of public policy, emphasising instead the role of interests and explaining how policy evolves, rejecting ideological and idealist accounts. A third tradition criticises the other two for being reductionist, which prevents them from analysing the complexity of the historical and institutional contexts in which economic policy emerges.

The dispute about the relative importance of ideas and interests in the shaping of policy and events is among the oldest in political science. Since we can only know the world through concepts, the real opposition is not between ideas and interests but between two kinds of ideas. Interests do not exist in some substratum of human experience which is devoid of concepts. What individuals desire, intend, value and need are what constitute their interests.

The problem in political science has always lain in determining exactly what is involved in the different dimensions of interest, and how these are related to doctrines and other forms of intellectual knowledge which arise from systematic reflection on human experience. Doctrines in this sense are contrasted with the practical knowledge which is the basis of interests and of social life.

If all intellectual knowledge remained reflective it would be removed from practical experience and would have no influence on events. But intellectual knowledge, particularly if not exclusively in modern times, continually overflows its boundaries and has become an instrument of considerable power in the realisation of interests. This is most apparent in the case of the applications of scientific knowledge, but modern rationalism also extends to the design and evaluation of social and political institutions.