Social preferences and voting on reform: An experimental study

- Individual-specific uncertainty may cause anti-reform bias in voting on reform.
- We show that social preferences mitigate the anti-reform bias.
- Efficiency-loving preferences increase the likelihood of losers to vote for reform.
- Inequality aversion decreases the likelihood of gainers to vote for reform.
- For voting outcomes, a concern for efficiency matters more than inequality aversion.

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.