Public Opinion Regarding Fiscal Consolidation in the Face of Trade-offs

Abstract

Abstract Chapter 5 analyses the public’s fiscal policy priorities. Traditional survey questions used by the Eurobarometer and other surveys ignore that fiscal consolidation carries substantial trade-offs: in hard times, governments must cut spending or raise taxes to achieve it. This chapter accounts for these trade-offs by using data from two novel survey experiments conducted in Germany, Italy, Spain, and the United Kingdom. First, it uses a split-survey experiment to analyse whether and to what extent individuals support fiscal consolidation when different trade-offs are acknowledged. Second, the chapter uses a conjoint survey experiment in which respondents were asked to evaluate different combinations of fiscal policies, including fiscal consolidation. The results show that voters care less about government debt support than conventional surveys suggest. Although most citizens support fiscal consolidation in principle, reducing government debt is not a priority for them. This suggests that political actors, including centre-left parties, had a greater degree of freedom to respond to the crisis and were not as constrained by public opinion as one-dimensional survey questions suggest.