The Behavioral Foundations of Social Politics: An Experimental Approach

The dominant theoretical approaches in the comparative political economy of the welfare state provide two competing accounts for why some governments spend more on social policies than others. In the first, poor voters seek to increase their current income by taxing the rich, and social policy serves to redistribute income from the rich to the poor. In the second account, voters seek social insurance against future job loss, and social policy serves as an insurance mechanism rather than a redistributive one. Both of these theoretical accounts are based on unexamined behavioral assumptions. Most importantly, they share the assumption that voters can clearly distinguish between the redistributive and insurance elements of public policy and, therefore, that individual-level characteristics (income, labor market risks) systematically shape preferences over social policy. Our goal with this research is to examine the soundness of these behavioral assumptions. We do so with an experiment designed to assess preferences for policies that are purely redistributive, purely insurance, and those that combine elements of both. In the experiment, subjects earn money by answering math problems correctly and then vote on a tax rate that determines the amount of redistribution and insurance. Existing research in behavioral economics raises doubts about the capacity of participants to distinguish between the insurance and redistributive elements of public policy.