European Journal of Political Research 39: 109–143, 2001. © 2001 Kluwer Academic Publishers. Printed in the Netherlands. 109 Why people want something for nothing: The role of asymmetrical illusions SØREN WINTER 1 & POUL ERIK MOURITZEN 2 1 University of Aarhus, Denmark; 2 University of Southern Denmark, Odense, Denmark Abstract. This article examines if and why mechanisms exist at the individual citizen level that may contribute to public sector growth – and whether such mechanisms can be altered through provision of information about the costs of public services. We test and find empirical support for the theory of fiscal illusion according to which citizens underestimate the costs of public services and therefore demand more public spending than if they had been fully informed. We also develop and find empirical support for a theory of asymmetrical illusions. This theory claims that producers and users of public services are more spending-minded than ordinary taxpayers – and that limited rationality contributes to this difference. However, the provision of information about the unit costs of public services can weaken these mech- anisms of fiscal illusion and asymmetrical illusions. The test is based on tabular, logit, and experimental analysis of survey data from Odense, a Danish city with 175,000 inhabitants. Introduction According to two bodies of theories – both of which have been dominated by the public choice approach – fiscal policy making process tends to be biased in favor of increased spending. The theory of asymmetrical relations in fiscal policy making claims that the relationship between on one hand producers and users of public services and on the other hand the ordinary taxpayers is biased in favor of the former who advocate higher levels of spending. While this theory is based on an assumption of purely rational calculation, the theory of fiscal illusion emphasizes the non-rational factors. It claims that citizens systematically misperceive and underestimate the costs of public services, implying that the demand for services is greater than people really want. Due to electoral competition politicians increase public spending to accommodate the electorate. The first purpose of this paper is to examine if limited rationality af- fects citizens’ preferences for public spending and tax. We test the micro- foundation of the theory of fiscal illusion to see if citizens in general underestimate the costs of public services and if this leads to a higher demand for these services. We also develop and test a theory of asymmetrical illu- sions. The theory is developed by integrating elements of fiscal illusion theory