Electoral Chairs’ Seminars – January 30th

Buy-in for Buyouts: Attitudes Toward Compensation for Reforms

Vincent Arel-Bundock – Associate Professor at Université de Montréal

Political reforms are often held up by concentrated interest groups who lobby to block change that would benefit the majority. One under-examined policy response is to compensate the recalcitrant group in exchange for agreeing to the reform. We refer to such mass compensation schemes as public buyouts.  After laying out the theoretical case for and against buyouts, we design a series of survey experiments to gauge the determinants of public support for buyouts linked to two reforms—phasing out coal energy, and simplifying tax filing—both held up by vested interest groups.  Partisanship appears systematically related to attitudes towards buyouts, as does program design: buyouts find significantly more favor when they target individual workers, rather than companies.  Yet the chief objection to buyouts is normative: individuals’ “moral aversion” to compensating actors who hold up beneficial reforms dominates other salient concerns, like moral hazard.  Our results also highlight a vexing credibility problem: those who support reform also support reneging on the compensation once the reform is passed. Recipients may thus be right to fear policy reversals. Buyouts may be a democratically viable means of passing beneficial reforms that have been blocked for decades—yet their design proves decisive.

This content has been updated on 26 January 2023 at 9 h 39 min.