Poster #134 - Words Can Move Mountains: How Policy Narrative Changes Individuals' Preferences of Policy Instruments

• In Event: Friday Poster Reception

Abstract

A compelling story can alleviate the government's administrative burden. While considerable attention has been given to how policy narratives affect public support for policies, limited research has explored their impact on individuals’ understanding of policy instruments, especially in the case of complex policies. Improving public comprehension of policy tools not only helps reduce implementation costs but also fosters closer collaboration between the government and the market. However, existing research on how policy narratives shape public perceptions of complex policy instruments remains limited.

To address this gap, we conducted a survey experiment in China to examine how policy narratives affect individuals’ understanding of policy instruments. In 2022, the Chinese government launched a pilot program for the personal pension policy in 36 cities across the country. Two years later, in December 2024, the policy was expanded nationwide. During the period of intense public discussion about this policy, we conducted a survey experiment combining information interventions and conjoint analysis, with a sample of 2,775 individuals distributed across 31 provinces in China. Four distinct policy narrative interventions, alongside a conjoint experiment, were used to test how these narratives influenced the public’s understanding of policy instruments.

The baseline findings of our research can be explained in three parts. The income tax deduction, which served as the government’s promotional slogan, forms the first dimension, showing that citizens prefer higher tax deductions over lower baselines. The second part highlights the public’s demand for government-backed guarantees, revealing that citizens strongly favor government-provided savings or investment return guarantees over market-based securities. The third part reflects citizens’ preferences for greater transfer and withdrawal flexibility.

Furthermore, we found that individuals with better financial conditions, more comprehensive social security coverage, and higher levels of trust in government tend to prefer policy instruments with government guarantees. Those with hospitalization experience showed stronger opposition to government guarantees. Individuals with higher financial literacy demonstrated a greater preference for higher tax deductions but opposed transfers between their own accounts.

Given the preference for personal pension instruments among Chinese residents, we further discovered that citizens' preferences for different policy instruments are influenced by policy narratives in varying ways. We constructed four distinct policy narrative scenarios, along with a control group that received only basic information. The income redistribution narrative reduced public support for money transfers between family accounts, as individuals feared the money could be taken away. The financial efficiency narrative increased support for higher income tax deductions. The policy goal narrative had dual effects: it increased support for tax deduction instruments by enhancing public understanding of policy intentions, while simultaneously reducing support for market-based solutions, as citizens expressed greater confidence in government management of these funds. The policy diversity narrative increased the public’s preference for inter-account transfer flexibility.

Our research contributes to understanding how diversified policy narratives can alter public understanding of policy tools and, consequently, influence policy support. The study also offers insights into how governments can effectively employ policy narratives for complex policies to enhance public comprehension of policy instruments and alleviate administrative burdens.

 

Author

• Boyan Liu, Tsinghua University
  Presenting Author