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Voter Responses to Fiscal Austerity

Published online by Cambridge University Press:  16 September 2020

Evelyne Hübscher*
Affiliation:
Central European University, Vienna, Austria University of Geneva, Switzerland
Thomas Sattler
Affiliation:
University of Geneva, Switzerland
Markus Wagner
Affiliation:
University of Vienna, Austria
*
*Corresponding author. E-mail: huebschere@ceu.edu

Abstract

Governments have great difficulties designing politically sustainable responses to rising public debt. These difficulties are grounded in a limited understanding of the popular constraints during periods of fiscal pressure. For instance, an influential view claims that fiscal austerity does not entail significant political risk. But this research potentially underestimates the impact of austerity on votes because of strategic selection bias. This study addresses this challenge by conducting survey experiments in Spain, Portugal, Italy, the UK and Germany. In contrast to previous findings, the results show that a government's re-election chances greatly decrease if it proposes austerity measures. Voters object particularly strongly to spending cuts and, to a lesser extent, to tax increases. While voters also disapprove of fiscal deficits, they weight the costs of austerity policies more than their potential benefits for the fiscal balance. These findings are inconsistent with the policy recommendations of international financial institutions.

Type
Letter
Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press

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