The Social Democratic Tragedy of Responsibility: Why Austerity Is a Losing Game for the Left

Over the last 40 years, left-wing parties have increasingly abandoned their own economic growth strategy to embark on a right-wing journey of fiscal discipline. In many Western countries, this run to the right has been followed by a substantial loss of electoral support for the Left. I argue that the constraining role of an austerity agenda can help to explain these tendencies. More precisely, I set out to investigate how governments respond to increases in attention to austerity in the political system. The study presents a new way of measuring the fiscal pressure faced by politicians based on data from the Manifesto Project Database. Drawing on issue ownership theory, I hold that an asymmetric perception of fiscal responsibility in favor of right-wing parties force left-wing governments to respond to such pressures by outbidding their political opponents in fiscal discipline. I show that the increase in fiscal discipline by the Left contributes to higher income inequality but has no significant effect on economic growth. This leaves both partisan left-wing voters and voters concerned about economic growth unsatisfied – indeed, a true social democratic tragedy of responsibility. Support for my claims is found estimating a set of error correction models with data from 21 OECD countries between 1980 and 2006.