The Electoral Consequences of Large Fiscal Adjustments

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.