Why Austerity? The Mass Politics of a Contested Policy

Kirk Bansak,Yotam Margalit,Michael M Bechtel

doi:10.1017/s0003055420001136

Abstract

The effects of austerity in response to financial crises are widely contested and assumed to cause significant electoral backlash. Nonetheless, governments routinely adopt austerity when confronting economic downturns and swelling deficits. We explore this puzzle by distinguishing public acceptance of austerity as a general approach and support for specific austerity packages. Using original survey data from five European countries, we show that austerity is in fact the preferred response among most voters. We develop potential explanations for this surprising preference and demonstrate the empirical limitations of accounts centered on economic interests or an intuitive framing advantage. Instead, we show that the preference for austerity is highly sensitive to its political backers and precise composition of spending cuts and tax hikes. Using a novel approach to estimate support for historical austerity programs, we contend that governments’ strategic crafting of policy packages is a key factor underlying the support for austerity.

Highlights

I t is often said that the general public has little interest in, or grasp of, the intricacies of economic policy
We find that in all five countries a majority—or even supermajority, in the case of France and Italy—favors austerity as a response to the financial crisis
Our data do not allow us to test this explanation, but it seems consistent with our findings. These results indicate that standard accounts of economic policy preferences that emphasize political ideology and material selfinterest offer limited explanatory power when trying to understand voters’ decisions about which fundamental approach to pursue when responding to a financial crisis

Summary

Introduction

I t is often said that the general public has little interest in, or grasp of, the intricacies of economic policy. Since the global financial crisis erupted in 2008, a fierce public debate has centered on the effectiveness of austerity, a restrictive fiscal economic program that prescribes a reduction of government budget deficits and a stabilization of public debt. Austerity—which entails cuts in public spending, an increase in taxation, or a combination of both—has spawned debate on two different fronts: the economic merits of this approach and its political feasibility. We thank Leonardo Baccini, Lucy Barnes, Allison Carnegie, Matthew Gabel, Page Fortna, Nikhar Gaikwad, Arnaud Maurel, Simone Paci, Ken Scheve, Margit Tavits, Nina Wiesehomeier, Noah Zucker, and audiences at the 2019 EPSA Annual Conference and Columbia University for helpful comments. The preanalysis plan is available at https://dataverse.

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