The Electoral Consequences of Large Fiscal Adjustments

Alberto Alesina, Dorian Carloni and Giampaolo Lecce

No 17655, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: H2 H3 H5 (search for similar items in EconPapers)
Date: 2011-12
New Economics Papers: this item is included in nep-cdm and nep-pol
Note: PE POL
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Citations: View citations in EconPapers (64)

Published as The Electoral Consequences of Large Fiscal Adjustments , Alberto Alesina, Dorian Carloni, Giampaolo Lecce. in Fiscal Policy after the Financial Crisis , Alesina and Giavazzi. 2013

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Chapter: The Electoral Consequences of Large Fiscal Adjustments (2012)
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