The Electoral Consequences of Large Fiscal Adjustments

41 Pages Posted: 12 Dec 2011 Last revised: 30 Mar 2023

See all articles by Alberto F. Alesina

Alberto F. Alesina

Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Dorian Carloni

affiliation not provided to SSRN

Giampaolo Lecce

University of Groningen - Faculty of Economics and Business

Date Written: December 2011

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.

Suggested Citation

Alesina, Alberto F. and Carloni, Dorian and Lecce, Giampaolo, The Electoral Consequences of Large Fiscal Adjustments (December 2011). NBER Working Paper No. w17655, Available at SSRN: https://ssrn.com/abstract=1971478

Alberto F. Alesina (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States
617-495-8388 (Phone)
617-495-7730 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Dorian Carloni

affiliation not provided to SSRN ( email )

No Address Available

Giampaolo Lecce

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

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