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Opinion – Latin America21: Chile: the convention, the plebiscite and loss aversion

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Many thought that the overwhelming result of approval (78.27%) in Chile’s October 2020 plebiscite ensured the success of the exit plebiscite. Others, more critical, bet that the bad conception of the whole process would result in the construction of a “Christmas tree” type constitution, full of rights and gestures for all the sensitivities present in the environment, which would make it almost impossible to reject it. Some also pointed out that it would be very difficult for anyone to dare to elaborate and unfurl the intellectual flag of rejection.

However, the results of different polls in recent weeks show a considerable increase in rejection, even surpassing approval in some, to which are added expressions of disenchantment and concern in the media and social networks. Therefore, the initial auspicious forecasts should at least be put on hold.

Given the perceptions that wander and applying the classic prospective theory of Kahneman and Tversky, which explains how people make decisions between alternatives that involve risks, I dare to suggest that it has taken hold in public opinion, in the face of the debate on the Constitutional Convention (CC ), an aversion to defeat.

The theory proposes that the decisions of people at risk tend to make choices that give greater certainty (“certainty effect”) in the face of potential gains. In decision making, loss aversion is stronger than potential gains. In the opinion of Kahheman and Tversky, it is only when we see that all our options are bad that we are willing to take potential risks in order to achieve certain benefits. Evidently, the definition of gains or losses is determined by a reference point that corresponds to the place where the voter is, in this case, the voter at the time of voting.

Thus, the overwhelming 78% in favor of approval in 2020 can be understood as a decision in the frame that all options were bad. To continue with the same Constitution was to continue with the country in crisis. Let us not forget the chaotic situation in which Chile found itself at the time of the plebiscite.

Although the approval option could be considered risky, at this point it was seen as a promising way out. Similar optimism can be seen in the success of the popular “People’s List” and independents in electing constituents. This could be explained by the failure of the traditional ruling elite to meet expectations, which gave rise to anger and frustration and the pursuit of risky and disruptive political alternatives.

But now the scenario is different. There are two options: one that establishes certainties (the 2005 Constitution) and another that promises improvements but also risks (the proposal being drafted by the CC). The context factor plays a key role in decision-making by transforming the reference point, which is called the “landmark effect”.

What we have seen so far, from the installation of the CC to its results in committees and in the plenary, has meant a great sense of loss for many. The first was that the actions of the CC, individual and/or collective, did not help to respond to one of its main expectations: to reduce the polarized environment that had settled in the country.

The risky bet of many was to clean up the country after the 2020 referendum, but in light of the facts, it did not have any effect. A series of unfortunate events fueled this perception. From then on, there are a series of declarations and actions by many of its members who operated in the opposite direction to the bet that the country made. But this disenchantment will not necessarily determine a position on the vote; it may be a condiment, but not necessarily the final justification.

There are different perceptions regarding the exit plebiscite that would affect the moment of voting. It should be taken into account that each individual or group has established a set of expectations about the work of the CC. Furthermore, it is worth noting that cognitive shortcuts are important in this theory; voters will never handle the whole articulation in all its details, adopting a position based on the issues that interest them.

There are at least three positions that could lead to the rejection of the draft Constitution, and clearly there can be a combination of these categories. First, there will be those who look holistically at the project of the Constitution and who feel that “everyone’s house” has not been built on it. This set of individuals will choose to keep the existing one, even if they don’t fully like it.

In second place are those who saw the constituent process as a way of positioning their topics of interest and enthusiastically used the participation mechanisms opened by the CC. However, their objectives may have been discarded or, even worse, the constitutional proposal itself could pose a further threat to them. By way of example, parents of subsidized schools, those defending individual ownership of pension savings, groups defending rural traditions, groups defending central bank autonomy, academics, etc. can be identified.

Ultimately, the expectations created in the participation process could end up in the perception of a strong loss. Let’s think about it this way: how many of the 77 popular initiatives that reached 15,000 signatures to join the CC, not counting those that could not access (2,496, published), will be accepted by the new text?

Thirdly, we could identify those who are fearful and skeptical of the mood and forces that prevail within the CC. For these, the most convenient action will be rejection, because the improvements promised by CC are not comparable with the losses. Here we can mention the different religious groups and their rejection of abortion in defense of their beliefs, the defenders of the idea of ​​nation and their rejection of plurinationality, the lawyers and their reticence towards the new justice system, etc.

Thus, people’s decision will be closely related to their point of reference and clearly the landmark effect will be decisive in the definition of loss or gain. The economic situation on the horizon and the weakness and/or strength of the government will also be important. In other words: will the benefits promised by the new Constitution be able to offset the uncertainty it opens and the perception of loss?

To this must be added the more reformist position of some on the fact that it will not be Pinochet’s Constitution (1980) to govern in the event that rejection triumphs, but Ricardo Lagos’s (2005) possible plans B (“certainty effect”) are being considered.

Augusto PinochetChileLatin AmericaleafSouth America

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