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Effect of tax increases (gray) and spending cuts (black) on government vote intentions as left-right position of voters changes; y-axis shows predicted share of voters who vote against the government as voters become more right-wing; point predictions with 95% confidence interval.
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Governments have great difficulties to design politically sustainable responses to rising public debt. These difficulties are grounded in a limited understanding of the popular constraints during times of fiscal pressure. For instance, an influential view claims that fiscal austerity does not entail significant political risk. But this research pot...
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Context 1
... do so, we first interact the fiscal policy treatments with voter ideology. 3 The lines in Figure 3 show how the predicted probability of voting against the government changes conditional on voter left-right ideology for each of the two scenarios, relative to a policy of doing nothing. Consistent with the previous literature (Bechtel, Hainmueller and Margalit, 2014), voter ideology strongly moderates the e↵ect of fiscal policy announcements on vote intentions. ...
Citations
... Estos temas, que fueron ampliamente investigados en décadas anteriores (por ejemplo, Stevenson, 2001;Erickson et al., 2002), volvieron a suscitar gran interés entre los científicos sociales a partir de la depresión de 2008. La literatura académica se centró en estudiar qué efectos tuvo esta crisis en las actitudes hacia el estado de bienestar (Diamond y Lodge, 2013;Margalit, 2013;Ervasti et al., 2013;Anderson y Hecht, 2014;Laenen y Van Oorschot, 2020;Curtice, 2020), hacia las políticas sociales y redistributivas (Soroka y Wlezien, 2010;Brunner et al., 2011;Fisman et al., 2015;Calzada y Del Pino, 2016;Rehm, 2016;Rueda y Stegmueller, 2019), y hacia los programas de austeridad (Calzada y Del Pino, 2018;Alesina et al., 2019;Häusermann et al., 2020;Busemeyer, 2021;Hübscher et al., 2021). La debacle económica de la pandemia vuelve a situar en primer plano estas cuestiones (Breznau, 2021;Miyar-Busto y Mato-Díaz, 2021;Asano et al., 2021), con el estímulo de que, ahora, es factible examinar la reacción de la opinión pública ante dos vías diferentes de acción política pues, mientras Cicuéndez Santamaría, Ruth El apoyo social a las políticas públicas en épocas de crisis: preferencias de gasto público durante la pandemia y la Gran Recesión en la Gran Recesión se implantaron estrictas medidas de consolidación fiscal, durante la COVID-19 se ha optado por un incremento inédito del presupuesto (Ferragina y Zola, 2021;Orton y Sarkar, 2022). ...
... No obstante, la abundante evidencia empírica disponible indica que las preferencias de política pública están condicionadas por la evolución de la situación económica (Erikson et al., 2002;Giuliano y Spilimbergo, 2014;O'Grady, 2019;Marten, 2019;Kumlin et al., 2021;Barnes et al., 2022), y que las actitudes hacia el gasto varían en función de los ciclos económicos (Stevenson, 2001;Soroka y Wlezien, 2010;Brunner et al., 2011;Fernández-Albertos y Kuo, 2016;Cicuéndez, 2021). En consecuencia, los académicos han procurado, desde los años setenta, comprender los cambios de la opinión pública en situaciones de crisis, y este interés aumentó durante la Gran Recesión (Ahlquist et al., 2020;Asano et al., 2021;Busemeyer, 2021;Hübscher et al., 2021). ...
... La hipótesis alternativa asume que las actitudes hacia el gasto son «anticíclicas»: en coyunturas desfavorables, la sociedad respalda el incremento de los recursos para reforzar las prestaciones públicas, que paliarán las ingentes necesidades; en fases de prosperidad hay más confianza en la responsabilidad individual, y se considera que la mayoría de la población no necesitará estas prestaciones, por lo que el presupuesto debe reducirse (Brunner et al., 2011;Hübscher et al., 2021;Bremer y Bürgisser, 2022). Esta hipótesis de la protección gubernamental ha recibido más respaldo empírico (Kam y Nam, 2008;Blekesaune, 2013). ...
¿Qué impacto han tenido las dos crisis económicas recientes en las preferencias de política pública de los ciudadanos? Durante la Gran Recesión, las respuestas gubernamentales se focalizaron en la implantación de medidas de austeridad, mientras que durante la emergencia de la COVID-19, que implicó la interrupción de la actividad económica, se han orientado hacia un incremento sin precedentes del presupuesto para atender con urgencia las necesidades colectivas. Estos dos contextos proporcionan un escenario idóneo para investigar los cambios de la opinión pública en coyunturas críticas. En este sentido, el artículo examina la evolución de las preferencias de política pública de los españoles desde el inicio de la recesión de 2008, centrándose en el período de la pandemia. Para ello se analizan las actitudes hacia el gasto público en seis áreas esenciales, a partir de los datos de encuestas realizadas entre 2005 y 2022. Los resultados sugieren que las preferencias de gasto cambian significativamente en estas situaciones, al menos a corto plazo, y que la sociedad apoya el aumento del presupuesto, aunque establece prioridades entre las políticas públicas. Además, se observa que estas prioridades de gasto han variado entre la Gran Recesión y la crisis sanitaria. Finalmente, se pone de manifiesto que se ha producido cierta polarización en función de la clase social y de la orientación ideológica.
... The empirical evidence on electoral punishment, however, is mixed: In the earlier stage of the scholarship, sometimes referring to the economic benefits of austerity (e.g., Alesina and Ardagna 2010), empirical studies emerged to cast doubt on this claim (e.g., Giger and Nelson 2011;Giger 2010;Arias and Stasavage 2019;Peltzman 1992). More recent studies, in contrast, provide empirical evidence in favour of the 'electoral punishment' thesis (e.g., Bojar et al. 2022;Jacques and Haffert 2021;Hübscher et al. 2021). The scholars of this line also scrutinize conditions in which the 'electoral punishment' thesis holds. ...
... For instance, Lindbom (2014), who analysed the effect of hospital closures, pointed out that policy transparency matters for electoral punishment. Furthermore, Hübscher et al. (2021), through a series of survey experiments, found that spending cut proposals are more likely to incur unpopularity than tax hike proposals. Bojar et al. (2022) also revealed that the adverse effects of fiscal austerity on people's propensity to vote for incumbents depend on the unemployment rate, involvement of international organizations in such measures, and the number of concurrent protest movements. ...
... 7 The same formula is used by Ulfelder (2005). 8 According to some arguments, visible austerity measures, such as welfare cuts, are more likely to stimulate public responses (Lindbom 2014;Hübscher et al. 2021); therefore, I am aware that my strategy to use change in fiscal balance, which is much less invisible than welfare cuts, is not free of criticism. Conversely, however, my strategy is methodologically conservative in that it uses less advantageous measurements to test my arguments. ...
Fiscal austerity is a policy characteristic of governments that adhere to conservative economic ideologies. In recent decades, however, especially after the 2009 Euro-zone Crisis, leftist and left-centre coalition governments have also adopted austerity policies. While it is documented that fiscal austerity incurs electoral costs upon incumbent governments and these costs depend on their partisanship, whether and how the partisanship of the incumbent government affects the pattern of protest movements remains unknown. In this paper, I hypothesized that fiscal austerity by leftist governments, through adding a 'premium' to public grievances and demin-ing citizens' utility of electoral participation, results in a higher likelihood of protest movements than fiscal austerity implemented by right-dominant governments. I supported this hypothesis by analysing panel data for 37 developed countries between 1973 and 2015. Besides, the partisan-pronounced effects on the protest likelihood are observed particularly for non-violent protests such as demonstrations and strikes and for the post-2000 era.
... In a seminal analysis twenty years ago, Boeri et al. (2001) demonstrated that a positive orientation towards a single policy does not necessarily mean that citizens also opt for this policy when they learn that they have to pay its price through higher taxes or social security contributions. Such hard choice settings and their determinants have recently moved to the center of analyses of social and fiscal policies Bremer and Bürgisser, 2022a,b;Busemeyer and Neimanns, 2017;Busemeyer and Garritzmann, 2017;Gallego and Marx, 2017;Häusermann et al., 2019Häusermann et al., , 2022Hübscher et al., 2021). We enrich this literature by putting taxes front and center. ...
... In contrast, studying priorities provides valuable information to policymakers and scholars alike about which policies citizens deem essential (see also, Hanretty et al., 2020). Thus, an emerging body of research has explicitly studied trade-offs in the realm of fiscal policy (Bansak et al., 2021;Barnes et al., 2022;Bremer and Bürgisser, 2022a;Hübscher et al., 2021;Tuxhorn et al., 2021), social policy (Bremer and Bürgisser, 2022b;Busemeyer and Garritzmann, 2017;Gallego and Marx, 2017;Häusermann et al., 2019), and environmental policy (Armingeon and Bürgisser, 2021). ...
It is commonly assumed that voters favor lower taxes, which undermines the ability of governments to raise revenues. How does the demand for lower taxes change when it involves fiscal trade-offs? Who supports tax cuts at all costs? We use a survey experiment conducted in four European countries (Germany, Italy, Spain, and the UK) to answer these questions, studying preferences on income taxes, value added taxes (VAT), and top income taxes. The results show that support for income tax and VAT cuts drops profoundly when it implies lower government spending or higher government debt. Lower top income taxes are always unpopular. Both interest and ideology influence preferences, but for cross-pressured people, ideology dominates: high-income voters that are left-wing oppose tax cuts. The results are important because they suggest that a progressive coalition against lower taxes – including low-income voters and the high-income left – is possible.
... We also contribute to scholarship examining the microfoundations of attitudes toward austerity and government debt reduction. This literature points to the role of political cues, ideology, and egotropic preferences as a source of attitudes toward fiscal policy and debt consolidation (Hübscher et al., 2020(Hübscher et al., , 2021Bansak et al., 2021;Barnes and Hicks, 2021;Ferragina and Zola, 2022). As Bremer and Bürgisser (2022) explain, this once quiet area of public policy has become heavily politicised. ...
Popular media and politicians have often blamed the high public debt of some EU countries on cultural differences. These claims are most apparent in the discourse contrasting ostensibly prudent Northern Europeans with spendthrift Southern Europeans. Despite the prominence of these and similar narratives and evidence that culture plays a nontrivial role in other economic outcomes, there is no systematic evidence that culture influences attitudes towards sovereign debt in the EU. We provide the first empirical test of this claim using over 233,000 responses to a Eurobarometer question about the salience of national debt. Our analysis reveals that national and sub-national differences explain very little of the variance in debt preferences. Further, the differences that do emerge do not fit existing cultural narratives. Additional analysis reveals that established measures of national culture or religious observance, at the national and regional levels, do not correlate with debt attitudes as cultural arguments would predict.
... Only cuts in defense spending and that social policies enjoy broad support in the population (Blekesaune and Quadagno, 2003) and limits the possibilities to manipulate public support by shifting the burden of adjustment from one fiscal policy field to another. Moreover, not only left, but also right voters negatively react to fiscal adjustments (Hübscher, Sattler and Wagner, 2021). 7 ...
... Defense spending, however, generally amounts to significantly less than 2% of GDP, which limits the possibility to mainly adjust via defense. 7 Left voters reacting more strongly to adjustments, but a majority of right voters also opposes fiscal cuts (see Hübscher et al. 2021: figure 3, p. 1755). Relatedly, overall public support drops after austerity, and this does not differ between left or right governments (e.g., Talving, 2017;Bojar et al., 2022). ...
In recent decades, governments in many Western democracies have shown a remarkable consensus in pursuing fiscal austerity measures during periods of strained public finances. In this paper, we show that these decisions have consequences for political polarization. Our macro-level analysis of 166 elections since 1980 finds that austerity measures increase both electoral abstention and votes for non-mainstream parties, thereby boosting party system polarization. A detailed analysis of selected austerity episodes also shows that new, small and radical parties benefit most from austerity policies. Finally, survey experiments with a total of 8,800 respondents in Germany, Portugal, Spain and the United Kingdom indicate that the effects of austerity on polarization are particularly pronounced when the mainstream right and left parties both stand for fiscal restraint. Austerity is a substantial cause of political polarization and hence political instability in industrialized democracies.
... The implication is that, in a country where the competitiveness view dominates the discourse about the current account, it is easier for political actors to justify "belt-tightening" policies that can be politically risky (Hübscher et al. 2015;Hübscher 2018;Hübscher et al. 2020), but which are important to achieve competitiveness and higher exports and, hence, an external surplus (Baccaro and Benassi, 2017;Haffert, 2019). Citizens who are continually exposed to this perspective are more inclined to accept these policies because they believe that they are in their own interest as well as that of the country. ...
The economic imbalances that characterize the world economy have unequally distributed costs and benefits. That raises the question of how countries could run long-term external surpluses and deficits without significant opposition against the policies that generate them. We show that political discourse helps to secure public support for these policies and the resulting economic outcomes. First, a content analysis of 32 000 newspaper articles finds that the dominant interpretations of current account balances in Australia and Germany concur with very distinct perspectives: external surpluses are seen as evidence of competitiveness in Germany, while external deficits are interpreted as evidence of attractiveness for investments in Australia. Second, survey experiments in both countries suggest that exposure to these diverging interpretations has a causal effect on citizens’ support for their country’s economic strategy. Political discourse, thus, is crucial to provide the societal foundation of national growth strategies.
... Most studies show that lower incomes and higher labour market risks are positively related to support for the welfare state (Rehm 2009(Rehm , 2016Iversen and Soskice 2001;Schwander and Häusermann 2013; Rueda and Stegmueller 2019). Political support for welfare state retrenchment should as a result be particularly low during crises as spending cuts may be associated with substantial electoral risks for incumbent governments (Wenzelburger 2011;Hübscher and Sattler 2017;Hübscher et al. 2020;Bojar et al. 2021). However, many governments did retrench their welfare state during or shortly after economic crises and several studies also fail to identify a punishing electoral effect of austerity (e.g. ...
... 2 Thus, faltering growth has two opposite effects: higher risks raise demand for greater spending, while falling income reduce support for the welfare state. If the effect of income stagnation dominates, at least for 2 We focus separately on spending and tax preferences because voters react differently to them and are primarily opposed to spending cuts rather than tax increases (Hübscher et al. 2020;Jacques and Haffert 2021). politically powerful groups in the electorate, then we can expect support for retrenchment to go up rather than down during economic crises. ...
... Why do governments implement welfare state retrenchment? Not only are fiscal consolidations often economically inefficient (Blyth 2013; Blanchard and Leigh 2013), but also electorally risky (Wenzelburger 2011;Hübscher and Sattler 2017;Hübscher et al. 2020;Bojar et al. 2021). ...
What are the political effects of income stagnation on the welfare state? To answer this question, we develop a simple political economy model linking stagnation to greater political support for welfare state retrenchment via three distinct mechanisms: (1) an altruistic mechanism where stagnation reduces altruistic motives for welfare state redistribution; (2) an insurance as ‘luxury good‘ mechanism where stagnation decreases the relative perceived gains from insurance; and (3) a subjective cost of taxation mechanism where stagnation heightens the relative costs of taxation. To test our argument, we combine novel data on the evolution of income stagnation to three existing datasets on individual preferences for the welfare state, on electoral behaviour of individuals, and on welfare state retrenchment. Our micro-level empirical analyses are consistent with our expectations. First, individuals facing stagnant or lower incomes support spending cuts to a greater extent. Second, individuals penalise the incumbent at the ballot box for retrenchment policies when their incomes are growing, but reward them if their income are stagnating. Thus, governments have electoral incentives to implement spending cuts when incomes stagnate. In turn, at the macro level, retrenchment is more pronounced in times when countries experience lower income growth. Taken together, our findings link the literature on income stagnation to comparative political economy studies of changing welfare states. In contrast to accounts focusing on the level of income and risk, this article helps us make sense of why governments find it politically attractive to retrench their welfare states, not despite but because of difficult economic times. Income stagnation does not only undermine the fiscal sustainability of welfare states, it also saps its political foundation.
... A fundamental critique to be raised against our analysis is that we should rarely observe electoral punishment for retrenchment in observational data. Parties anticipate backlash and avoid the implementation of reforms when blame avoidance techniques are not available, the argument goes (Hübscher et al., 2021;Wenzelburger, 2014). We acknowledge this critique. ...
... This mechanism is pivotal, for example, for the insider-outsider dilemma of social democratic parties (Lindvall & Rueda, 2014;Rueda, 2005). Studies on the electoral backlash against austerity rely on a similar mechanism (Hübscher et al., 2021;Jacques & Haffert, 2021). While this research offers important insights, our findings emphasize that the potential limitations regarding its required assumptions should be taken more seriously. ...
... While this research offers important insights, our findings emphasize that the potential limitations regarding its required assumptions should be taken more seriously. For example, the finding that voters disapprove of spending cuts, as shown by survey experiments (Hübscher et al., 2021), will not have the proposed electoral implications when voters do not observe actual spending cuts or when party elites are able to shift voter preferences in the political process. The insider-outsider and austerity literatures are only two examples, but the underlying mechanistic worldview exceeds them. ...
The expectation that welfare retrenchment and expansion have electoral consequences for governing parties is widespread in welfare state research. Previous research either argues that welfare state change has electoral consequences across the board or that this is at least the case under certain conditions, such as a left party in government. In this study, we synthesize existing theoretical approaches into a stylized theoretical model and discuss why the assumptions underlying the electoral consequences argument may be questionable. We then conduct an empirical analysis of the electoral fates of government parties in 20 European countries. A wide range of statistical specifications provide practically no evidence for electoral consequences of welfare state changes even under favorable conditions. The importance of welfare changes for electoral outcomes may therefore be overstated.
... One strand of this literature finds that incumbent politicians do not face electoral costs when implementing fiscal consolidation at the national ( Alesina et al., 2012;Brender and Drazen, 2008 ) or local level ( Carreri and Martinez, 2021 ). 5 On the other hand, a number of papers show that fiscal austerity has negative effects on voter support for the incumbent (e.g. Hübscher et al., 2021 ) as well as on broader socio-political outcomes, such as increasing support for right-wing populism 3 Note that we survey current mayors who are most likely not the same mayors as in our main analysis as it is conducted nine years after the reform. Furthermore, the survey has a response rate of 6% and this sub sample, despite being similar to the overall population along several observable characteristics, could still be selected on characteristics unobservable to us. 4 While we focus on the political economy drivers of non-linear taxes, of course economic factors also drive them. ...
How does fiscal austerity affect redistributive policies? We document that during austerity episodes, countries tend to increase marginal income tax rates on top earners, but not on average earners. We then show that, in response to an exogenously imposed fiscal rule, Italian municipalities increase local non-linear income taxes progressively. They do not adjust other fiscal policies. College-educated mayors are more likely than less educated mayors to implement progressive reforms, and they perform better in the upcoming election. Survey evidence suggests that the differential policy response can be explained by college-educated mayors being more informed about the available policy options.
... For many local politicians, this meant a decision of cutting back on spending, increasing taxes, or escaping this dilemma by lobbying for state support. Since tax increases and pension cutbacks (due to lock-in effects and loss aversion, see, e.g., Pierson 1996;Hübscher et al., 2021) are presumably unpopular among voters, the lobbying-option was tempting. ...
We develop a perspective of locally embedded welfare state development to explain how relatively weak national political actors can nonetheless shape national policy over time by pursuing local reforms. Empirically, we assess our argument by using municipality-level vote shares, data on non-contributory pension reforms, roll-call votes from parliament, and archival material from early 20th-century Norway, where several local governments introduced non-contributory old-age pensions before a national scheme was adopted. We show, first, how (nationally underrepresented, but highly institutionalized) socialist parties with geographically concentrated support introduced local pensions. Over time, they thus shaped the possibility space for national reform, effectively locking the national policy-agenda to a pension system preferred by the socialists, namely non-contributory pensions. Citing high municipality-debt pressures in their constituencies, bourgeois politicians from districts with local pensions eventually supported and promoted national-level pension reform. This, in turn, spurred the cross-class alliance required to establish a national non-contributory pension system.
