uu.seUppsala University Publications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Austerity Politics: Is the Electorate Responsible?
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Government.ORCID iD: 0000-0003-0847-5601
2016 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis contributes to the public finance literature concerned with fiscal sustainability, and consists of an introduction and four stand-alone essays. The first three essays analyse the reasons why governments accumulate large levels of debt. In the first essay, I find that parties that implement fiscal consolidations are punished by the voters in the following election. However, there does not appear to be a rewarding effect for governments that implement fiscal expansions. The second essay, which is co-authored with Rafael Ahlskog, shows how voter opposition to fiscal consolidation is shaped by moral considerations and feelings of personal responsibility. More precisely, we argue that voters are more likely to refuse fiscal consolidation when they do not feel responsible for the public debt. The third essay argues that misperceptions about the business cycle would have caused fiscal problems even if policy-making was conducted by independent experts. According to my estimates, biased projections have weakened annual budget balances by approximately one per cent of GDP. In the fourth essay, I argue that budgetary mechanisms created to improve fiscal discipline have a bias toward a reduced public sector. Because discretionary decisions are usually required to adjust public expenditures to price and wage increases, periods of rapid growth have repeatedly caused the welfare state to shrink. I use the introduction to discuss the commonalities between the essays and to situate the field of public finance in a broader, historical context.

Place, publisher, year, edition, pages
Uppsala: Acta Universitatis Upsaliensis, 2016. , 35 p.
Series
Digital Comprehensive Summaries of Uppsala Dissertations from the Faculty of Social Sciences, ISSN 1652-9030 ; 124
Keyword [en]
Deficit bias, Fiscal policy, Perceptions, Political economy, Responsibility, Retrospective voting
National Category
Political Science (excluding Public Administration Studies and Globalization Studies)
Research subject
Political Science
Identifiers
URN: urn:nbn:se:uu:diva-274342ISBN: 978-91-554-9459-9 (print)OAI: oai:DiVA.org:uu-274342DiVA: diva2:896317
Public defence
2016-03-11, Auditorium Minus, Gustavianum, Akademigatan 3, Uppsala, 10:15 (Swedish)
Opponent
Supervisors
Available from: 2016-02-19 Created: 2016-01-21 Last updated: 2016-03-09
List of papers
1. Punished for austerity? The electoral consequences of fiscal adjustments
Open this publication in new window or tab >>Punished for austerity? The electoral consequences of fiscal adjustments
(English)Manuscript (preprint) (Other academic)
Abstract [en]

In both economics and political science, conventional wisdom states that austerity policies are unpopular among voters, and that those governments which implement tax hikes and cutbacks in public spending will lose votes in the subsequent election. However, this claim has received little empirical support. This paper finds that parties which implement fiscal consolidations are punished by the voters in the following election, a result that goes against previous research, but one which is in line with conventional wisdom. The estimated effects are larger when the adjustments are visible and when there is a unified control of policymaking. There do not appear to be any electoral consequences for implementing fiscal expansions.

National Category
Political Science (excluding Public Administration Studies and Globalization Studies)
Research subject
Political Science
Identifiers
urn:nbn:se:uu:diva-274337 (URN)
Available from: 2016-01-20 Created: 2016-01-20 Last updated: 2016-03-09
2. Politics or perceptions? The fiscal consequences of uninformed policy makers
Open this publication in new window or tab >>Politics or perceptions? The fiscal consequences of uninformed policy makers
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Cross-national variations in fiscal performance have traditionally been seen as resulting from differences in electoral systems and types of government. However, such politico-institutional explanations appear to be sensitive to the time-period analysed. This paper provides a new explanation of why some countries have managed to consolidate public finances, while others have accumulated unsustainable levels of debt. Using real-time data for a panel of 31 OECD countries over the 1997-2012 period, the paper shows that governments have responded to biased economic forecasts with more expansionary fiscal policies than they would have if projections had been unbiased. The estimated effects are large. On average, biased projections have weakened annual budget balances by approximately one per cent of GDP.

National Category
Political Science (excluding Public Administration Studies and Globalization Studies)
Research subject
Political Science
Identifiers
urn:nbn:se:uu:diva-274340 (URN)
Available from: 2016-01-20 Created: 2016-01-20 Last updated: 2016-03-09
3. Economic growth is deflating the welfare state
Open this publication in new window or tab >>Economic growth is deflating the welfare state
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Differences in economic growth is one of the primary explanations for why welfare state retrenchment has occurred in some countries and not others. Because public spending is only partially indexated to earnings, the welfare state shrinks as the economy prospers. Using growth data from countries with synchronized business cycles as an instrument, I demonstrate that the relationship can be interpreted as a causal effect of growth on both tax ratios and social spending.

National Category
Political Science (excluding Public Administration Studies and Globalization Studies)
Research subject
Political Science
Identifiers
urn:nbn:se:uu:diva-274341 (URN)
Available from: 2016-01-20 Created: 2016-01-20 Last updated: 2016-03-09
4. Not my problem: fairness and fiscal responsibility in the age of austerity
Open this publication in new window or tab >>Not my problem: fairness and fiscal responsibility in the age of austerity
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Voter opposition to fiscal consolidation is often attributed to intergenerational exploitation, short-sightedness or lack of information. While these mechanisms are likely at play, the effect of voters' moral considerations are largely absent from the public finance literature. This study addresses the effects of blame and feelings of personal responsibility on support for budget consolidations. We argue that voters will feel less responsibility for fiscal problems originating from a crisis in the banking sector than if those problems result from a continuous accumulation of deficits, and will therefore be less supportive of austerity measures to repay the resulting debt. Our results, which make use of both cross-country data and a survey experiment, are consistent with this. Since financial crises and many other costly events are practically random, this can have the profoundly counter-intuitive consequence that governments are punished harder for things that are outside of their control.

National Category
Political Science (excluding Public Administration Studies and Globalization Studies)
Research subject
Political Science
Identifiers
urn:nbn:se:uu:diva-274339 (URN)
Available from: 2016-01-20 Created: 2016-01-20 Last updated: 2016-03-09

Open Access in DiVA

fulltext(314 kB)148 downloads
File information
File name FULLTEXT01.pdfFile size 314 kBChecksum SHA-512
534ed890d5c357a0286d108014e942100989d138aad2c4721964d9443adf83feaf44c3bb4970ccbfe2dc5c86cf3517b8b1f250d5e2faf723d6a65606a5bb7a8b
Type fulltextMimetype application/pdf
Buy this publication >>

Authority records BETA

Nyman, Pär

Search in DiVA

By author/editor
Nyman, Pär
By organisation
Department of Government
Political Science (excluding Public Administration Studies and Globalization Studies)

Search outside of DiVA

GoogleGoogle Scholar
Total: 148 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

isbn
urn-nbn

Altmetric score

isbn
urn-nbn
Total: 767 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf