Austerity. Where and Why Politics Still Matters

In 2010-2015 almost all democratic countries pursued austerity. Why do democratic governments embark on austerity policies? A statistical analysis shows that the extent of deficits change is mainly a function of the previous level of deficits and other economic fundamentals, such as the interest rates on government bonds. In addition, membership in the Eurozone makes a difference. The partisan complexion of government is irrelevant, though. The decision for austerity is an economically contested strategy and it is quintessentially politically, since the state basically retreats from extracting revenues from the economy and from redistributing income in society. Is there really no role for politics? In a qualitative study  we focus on seven nations and their roads to austerity. We show that the decision of politicians  for austerity is driven by vote- and policy-seeking. These roads to austerity are contingent on nation specific contexts. The only common denominator is that politicians do austerity in such as way that it optimizes the chances to be reelected while preferably being compatible with  programmatic goals of the governing parties.