The Re‐Emergence of Partisan Effects on Social Spending after the Global Financial Crisis

Abstract

AbstractThis article analysed the effects of the global financial crisis on the political dynamics that shape social spending in Europe. It used panel data for 28 OECD countries during the pre‐crisis (1990–2007) and post‐crisis (2008–13) periods to test the extent to which social spending was affected by EU and domestic variables. Notable differences were found in the influence of EU membership on social spending before and after the crisis as well as an increase in political partisan effects on social expenditure post‐crisis. Additional data of party manifestos for 42 national elections across 26 EU member states during the crisis (2008–13) confirm the emergence of left–right party divisions over social welfare. This finding is significant as partisan effects were absent in the decades preceding the crisis. These results suggest a significant shift has taken place in European social spending in the wake of the Great Recession.