The Journal of Socio-Economics 37 (2008) 1729–1745
The Journal of Socio-Economics
journal homepage: www.elsevier.com/locate/soceco
Preference variability along the policy chain in Vietnam
C. Leigh Anderson
, Alison Cullen
, Kostas Stamoulis
University of Washington, Seattle, WA, USA
Food and Agriculture Organization of the United Nations, Viale delle Terme di Caracalla, 00100 Rome, Italy
a r t i c l e i n f o
Received 4 May 2007Received in revised form 22 February 2008Accepted 6 April 2008
a b s t r a c t
This paper explores whether there are systematic differences in decision-making betweenthose who regularly allocate public resources and those who are the intended recipients.To test for differences we sample across farmers and policy makers in Vietnam. Our ﬁnd-ings suggest that preference parameters such as fairness, risk orientation, discounting andcontrolsystematicallydifferbetweenthesetwogroups,andarepredictorsofthelikelihoodthat an individual is in a position of allocating public resources or receiving them. Regard-lessofwhetherthesedifferencesareinnateorsocialized,theymayhelptoexplaintheoftenunexpected outcomes of development policy interventions.© 2008 Elsevier Inc. All rights reserved.
Individuals make decisions both about allocating their own resources, and to varying degrees, about allocating collectiveresources. Our interest is in whether there are systematic differences in decision-making between those who are regularlyinvolved in allocating public resources for development, and the poorer individuals who are more frequently the intendedrecipients.Totestfordifferenceswesampleacrosstwogroupsofindividualswhovarybythecontrolandresponsibilitytheyhave over public resource allocation decisions in Vietnam.The motivation for our study is that a better understanding of patterns in decision-making can help to explain the oftenunexpectedoutcomesofdevelopmentpolicyinterventionsaimedatpovertyreduction.Themixedperformanceof60yearsof development assistance has led to changes in the prevailingparadigms includingthe search for the proper balance between“state-led” and “market-led” solutions. We are suggesting that this distinction may be artiﬁcial or, in any case, not the mostimportantone.Rather,developmentpolicyframeworksmayhavemissedsalientpointsofpeoples’behaviorwhichdeterminethesuccess(orlackthereof)ofthepoliciesthemselves.First,institutionalandprogramincentivesmaybepremisedonastrictmodel of rationality that ignores experimental ﬁndings on risk and fairness perceptions, and second, policy and resourcedecisions may be premised on the preferences of the policy maker, which can differ from the preferences of the intendedrecipients.Traditional economic models of decision-making assume that individuals make fully reasoned and consistent choices.Yet arguments of bounded rationality dating back 50 years, regular observation, and repeated experiments fail to supportsuch models, particularly for complex decisions made under uncertainty (Simon, 1955).Individuals often employ decision
Corresponding author at: Evans School, Box 353055, University of Washington, Seattle, WA, USA. Tel.: +1 206 543 0365; fax: +1 206 543 1096.
Evans School, Box 353055, University of Washington, Seattle, WA, USA.1053-5357/$ – see front matter © 2008 Elsevier Inc. All rights reserved.doi:10.1016/j.socec.2008.04.011