Buy-in for Buyouts: Attitudes Toward Compensation for Reform

Political reforms are often blocked by concentrated interest groups. An overlooked response is to “buy out” such groups, offering compensation in return for pushing through reforms. We present the theoretical case for and against buyouts and test public support through survey experiments on three policy proposals: phasing out coal energy, simplifying tax filing, and granting dictators amnesty. Buyouts gain majority support, but this depends on partisanship and program design. Buyouts for workers attract more approval than those for firms. Yet the dominant objection is normative: moral aversion appears as a greater concern than moral hazard. Many oppose rewarding actors who obstruct socially beneficial reforms. The results also highlight a credibility problem: those who support reform also support reneging on the compensation once the reform is passed, validating recipients’ fears of reversal. These findings suggest that while buyouts can render stalled reforms politically feasible, their democratic viability depends on careful design.