The Politics of Austerity

The political response to the financial crash of 2009 in western states (apart from the US) has focused on austerity, seeking to bring down budget deficits and control the rise of debt. There has however been significant variation in the nature of austerity policies and their effects across European states, in particular their social and political consequences and how these have been perceived by citizens. There has been a lively debate in many countries, and across the eurozone, about whether austerity is a necessary foundation for economic recovery or the main obstacle to it. This paper reviews the general pattern of austerity across western states, examining the fiscal rules and fiscal policies designed to deal with budget deficits and national debt. It look at the impact of austerity policies firstly on social cohesion, in particular the effects of austerity programmes on social and economic inequality; secondly on environmental sustainability, the extent to which effort and concern has been diverted from environmental goals; thirdly on the fiscal capacity of different levels of government, particularly the effects of austerity policies on the budgets and spending programmes of subnational governments; and fourthly the perceptions of citizens, particularly in terms of the effectiveness and fairness of austerity policies, how citizens perceive changes in their standard of living, and the effect of austerity on trust in politicians and engagement in mainstream forms of politics. The paper seeks to bring out the different meanings of austerity and the complex pattern of political response which these reflect.