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IZA Discussion Paper No. 18695
May 2026
A Remedy to the Demand for Bad Policy
Riccardo Ghidoni, Giovanni Immordino, Paolo Roberti

Voters often oppose welfare-enhancing policies because they fail to anticipate how others will adjust their behavior. We show that policy design can align political support with efficiency even under biased beliefs. We study priority policies, a remedy whose off-equilibrium incentives make reform attractive even to biased voters. In a theory-guided experiment, participants vote between an inefficient status quo and a treatment-specific welfare-improving reform. A Pigouvian-like tax attracts only 27.5 percent support; adding priority incentives raises it to 41.7 percent, and a pure-priority policy raises it to 70 percent. Treatment effects are mostly driven by biased participants.

Kommunikation
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
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+352 585-855-501
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Christina Gathmann
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Das IZA@LISER-Netzwerk ist eine weltweite Gemeinschaft für exzellente Forschung in der Arbeitsmarktökonomie und angrenzenden Fachgebieten. Nach dem Wechsel von Bonn wird das Netzwerk nun am Luxembourg Institute of Socio-Economic Research (LISER) koordiniert.

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