Cowles Foundation for Research in Economics
New Haven, CT 06520-8301
Information about this author at RePEc
NBER Working Papers and Publications
|February 2012||The Electoral Consequences of Large Fiscal Adjustments|
with Alberto Alesina, Dorian Carloni
in Fiscal Policy after the Financial Crisis, Alberto Alesina and Francesco Giavazzi, editors
This chapter considers the evidence supporting the conventional wisdom that deficit-reducing policies lead to electoral losses for fiscally conservative governments. It focuses on large fiscal adjustments, which are currently the center of attention in many Organization for Economic Cooperation and Development (OECD) countries, and shows that there is no evidence that governments which reduce budget deficits even decisively are systematically voted out of office. In some cases they are, in some (more often) they are not.
|December 2011||The Electoral Consequences of Large Fiscal Adjustments|
with Alberto F. Alesina, Dorian Carloni: w17655
The conventional wisdom regarding the political consequences of large reductions of budget deficits is that they are very costly for the governments which implement them: they are punished by voters at the following elections. In the present paper, instead, we find no evidence that governments which quickly reduce budget deficits are systematically voted out of office in a sample of 19 OECD countries from 1975 to 2008. We also take into consideration issues of reverse causality, namely the possibility that only "strong and popular" governments can implement fiscal adjustments and thus they are not voted out of office "despite" having reduced the deficits. In the end we conclude that many governments can reduce deficits avoiding an electoral defeat.
Published: The Electoral Consequences of Large Fiscal Adjustments, Alberto Alesina, Dorian Carloni, Giampaolo Lecce. in Fiscal Policy after the Financial Crisis, Alesina and Giavazzi. 2013