(), Rupert Sausgruber
() and Stefan Traub
Fabian Paetzel: Centre for Social Policy Research, University of Bremen
Rupert Sausgruber: Department of Economics, Vienna University of Economics and Business
Stefan Traub: Centre for Social Policy Research, University of Bremen
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.
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