Social Preferences and Voting on Reform - An Experimental Study

58 Pages Posted: 26 May 2012 Last revised: 25 Mar 2014

See all articles by Fabian Paetzel

Fabian Paetzel

University of the German Federal Armed Forces - Helmut Schmidt Universit├Ąt; DFG Research Group 2104

Rupert Sausgruber

Vienna University of Economics and Business - Department of Economics

Stefan Traub

University of the German Federal Armed Forces - Department of Economics; University of the German Federal Armed Forces - DFG Research Group 2104

Date Written: March 2014

Abstract

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.

Keywords: political economy of reform, social preferences, voting, redistribution, experiment

JEL Classification: C92, D72, D80

Suggested Citation

Paetzel, Fabian and Sausgruber, Rupert and Traub, Stefan, Social Preferences and Voting on Reform - An Experimental Study (March 2014). Available at SSRN: https://ssrn.com/abstract=2066455 or http://dx.doi.org/10.2139/ssrn.2066455

Fabian Paetzel

University of the German Federal Armed Forces - Helmut Schmidt Universit├Ąt ( email )

Holstenhofweg 85
Hamburg, 22008
Germany

DFG Research Group 2104 ( email )

Holstenhofweg 85
Hamburg, DE 22043
Germany

HOME PAGE: http://bedarfsgerechtigkeit.hsu-hh.de/en?set_language=en

Rupert Sausgruber (Contact Author)

Vienna University of Economics and Business - Department of Economics ( email )

Welthandelsplatz 1
Vienna, 1020
Austria
+43 1 31336 4572 (Phone)

Stefan Traub

University of the German Federal Armed Forces - Department of Economics ( email )

Holstenhofweg 85
Hamburg, 22043
Germany

University of the German Federal Armed Forces - DFG Research Group 2104 ( email )

Holstenhofweg 85
Hmaburg, DE 22043
Germany

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