Does the Broad Public Want to Consolidate Public Debt? – The Role of Fairness and of Policy Credibility
AbstractThe 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 votersâ support for consolidation. These results bear direct implications on the design of fiscal consolidation plans.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Kyklos.
Volume (Year): 66 (2013)
Issue (Month): 1 (02)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0023-5962
Other versions of this item:
- Helmut Stix, 2011. "Does the Broad Public Want to Consolidate Public Debt? – The Role of Fairness and of Policy Credibility," Working Papers 167, Oesterreichische Nationalbank (Austrian Central Bank).
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
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