Voter Responses to Fiscal Austerity

The strong opposition to the recent fiscal austerity policies uncovers the difficulties of governments in designing sustainable responses to rising public debt. These difficulties are grounded in our limited understanding of popular constraints that delimit government action during periods of fiscal pressure. For instance, the dominant view today points to a minimal impact of fiscal retrenchment on political stability. Yet, recent research indicates that this impact has been underestimated because of strategic selection bias and the multidimensional nature of fiscal consolidations. To address these challenges, we conduct survey experiments that allow us to establish how individual voters evaluate different types of austerity policies. Our analysis employs a mixture of randomized vignette and conjoint experiments to collect original, individual-level data in the United Kingdom and Spain. The results show that the reelection chances of governments decrease considerably when they proposal fiscal cuts. Specifically, if a conservative government proposes fiscal cuts, voters turn towards the left opposition party. If a left government proposes cuts, voters turn towards smaller, non-mainstream parties or abstain from voting.