Using data for 70 countries in the 1980s, this study investigates the impact of socioeconomic and political characteristics of a country on the vulnerability of expenditure categories during budget cuts. Greater democracy is associated with less vulnerability of the social and productive sectors and with more vulnerability of the administrative/defense, infrastructure, and miscellaneous sectors. Political instability reduces the vulnerability of the social, administrative/defense, and miscellaneous sectors and increases that of the productive sector. Fiscal federalism increases the vulnerability of the infrastructure and administrative/defense sectors and reduces that of the productive sector. The relative size of the budget cuts is also a determining factor. Copyright 2000 Blackwell Publishers Ltd..