A talk by Tim Hicks (University College London, UCL).
An initiative of the Political Economy Cluster at the Hertie School of Governance.
In the years since the financial crisis, fiscal policy has returned to political salience across the advanced industrial democracies. Elections across Europe have been won and lost on the basis of parties' positions on budgetary expansion or consolidation. Despite theoretical expectations that increasing payments to, and reducing benefits from the state should be unpopular, little systematic empirical work considers fiscal stance as something the public may have preferences over. Given its prominence in post-2008 politics, this is an important gap in our descriptive knowledge. This paper advances our understanding of public support for fiscal austerity - defined as a goal of maintaining or obtaining fiscal balance - in three steps. First, we examine patterns in support for austerity in a broad sample of developed democracies, finding that on average, austerity exhibits a rather high degree of popularity. Second, we relate baseline support for cuts to public borrowing to two broad schools of macroeconomic thought, which we label "Keynesian'' and "Austerian''. We provide estimates of the pervasiveness of these broad approaches to fiscal policy across the 28 EU member states for the period 2010--2016, and show that there is important and interesting cross-national and temporal variation in these estimates. Third, we provide validatory evidence for these latter observational inferences using survey experiments that demonstrate a causal connection from perceptions of the macroeconomy (of the UK) to attitudes towards public deficits.
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