Social Preferences and Voting on Reform: An Experimental Study

Paetzel, Fabian and Sausgruber, Rupert and Traub, Stefan (2014) Social Preferences and Voting on Reform: An Experimental Study. European Economic Review, 70. pp. 36-55. ISSN 0014-2921


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Debating over efficiency-enhancing but inequality-increasing reforms accounts for the routine business of democratic institutions. Fernandez and Rodrik (1991) hold that anti-reform bias can be attributed to individual-specific uncertainty regarding the distribution of gains and losses resulting from a reform. In this paper, we experimentally demonstrate that anti-reform bias arising from uncertainty is mitigated by social preferences. We show that, paradoxically, many who stand to lose from reforms vote in favor because they value efficiency, while many who will potentially gain from reforms oppose them due to inequality aversion.

Item Type: Article
Additional Information: This study was financed by the Collaborative Research Center 597 "Transformations of the State" of the University of Bremen. Rupert Sausgruber would like to express his gratitude for the research center's hospitality during his stay in Spring 2009. We are also grateful for the financial support of the Austrian Science Fund (FWF) under Project No. S10307. We thank Loukas Balafoutas, Peter Hammond, Wolfgang Höchtl, Rudolf Kerschbamer, Vai-Lam Mui, and Hannes Winner, as well as two anonymous referees, for their valuable comments and suggestions.
Keywords: political economy of reform / status quo bias / social preferences / voting / experiment
Classification Codes: JEL C92, D72, D80
Divisions: Departments > Volkswirtschaft
Departments > Volkswirtschaft > Finanzwissenschaft u öffentl. Wirtschaft
Forschungsinstitute > Internationale Besteuerung
Version of the Document: Accepted for Publication
Variance from Published Version: Minor
Depositing User: Elena Simukovic
Date Deposited: 19 Sep 2017 15:37
Last Modified: 19 Jul 2020 11:54
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