Resistance to socially desired reforms may arise from uncertainty about the consequences of reforms at the individual level (Fernandez and Rodrik, 1991). Without a binding commitment, a promise to compensate losers will not raise support for reforms due to a credibility problem. This paper shows that voting simultaneously on several reforms may solve the credibility problem. It is argued that the governmental agreement in the Netherlands has served as a means to vote simultaneously on several reforms and has helped breaking political deadlocks. Moreover, our model provides an explanation for some perceived changes in the Dutch policy making process.

hdl.handle.net/1765/7805
Tinbergen Institute Discussion Paper Series
Tinbergen Institute

Dur, A.J, & Swank, O.H. (1997). On the Role of the Governmental Agreement in Breaking Political Deadlocks (No. TI 97-023/1). Tinbergen Institute Discussion Paper Series. Retrieved from http://hdl.handle.net/1765/7805