Does the Broad Public Want to Consolidate Public Debt? – The Role of Fairness and of Policy Credibility

Helmut Stix

Working Papers from Oesterreichische Nationalbank (Austrian Central Bank)

Abstract: The paper tests selected long-standing hypotheses about why voters support or oppose fiscal consolidation. Deviating from most of the empirical literature which mainly focuses on cross-sectional and time series evidence, this paper employs data from a public opinion survey that has been conducted in spring 2010 in Austria. The results show (i) that voters are fiscally prudent, that (ii) they behave rationally in the sense that self-interest matters, that (iii) they care for the next generation (this effect is surprisingly small), that (iv) the distributional fairness among the current generation is as at least as important as the intergenerational aspect and that (v) the low credibility of medium-term fiscal policy plans can be a serious impediment to voters’ support for consolidation. These results bear direct implications on the design of fiscal consolidation plans.

Keywords: Public debt; fiscal adjustment; political economy; fairness; credibility (search for similar items in EconPapers)
JEL-codes: D12 H31 H63 (search for similar items in EconPapers)
Pages: 47
Date: 2011-05-10
New Economics Papers: this item is included in nep-pol
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Does the Broad Public Want to Consolidate Public Debt? – The Role of Fairness and of Policy Credibility (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbwp:167

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