Preferences for Reforms: Endowments vs. Beliefs

Author/Editor:

Romain A Duval ; Yi Ji ; Chris Papageorgiou ; Ippei Shibata ; Antonio Spilimbergo

Publication Date:

February 18, 2022

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Are preferences for reforms driven by individuals’ own endowments or beliefs? To address this question, we conducted a cross-country survey on people’s opinions on employment protection legislation—an area where reform has proven to be difficult and personal interests are at stake. We find that individuals’ beliefs matter more than their own endowments and personal pay-offs. A randomized information treatment confirms that beliefs explain views about reform, but beliefs can change with new information. Our results are robust to several robustness tests, including to alternative estimation techniques and samples.

Series:

Working Paper No. 2022/033

Frequency:

regular

English

Publication Date:

February 18, 2022

ISBN/ISSN:

9798400201295/1018-5941

Stock No:

WPIEA2022033

Pages:

49

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