Social Preferences and Voting on Reform - An Experimental Study
58 Pages Posted: 26 May 2012 Last revised: 25 Mar 2014
Date Written: March 2014
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: Suggested Citation