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Fiscal consolidation and voting: on the electoral costs of budgetary stability

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  • Santiago Lago‐Peñas
  • María Cadaval‐Sampedro
  • Ana Herrero‐Alcalde

Abstract

In this paper, we analyse the potential impact of policies aimed at fostering fiscal sustainability on citizens’ preferences. A survey specifically designed for this purpose quantifies citizens’ knowledge and concern about fiscal imbalances and the institutional framework that addresses them in Spain, and their possible electoral reactions to public spending cuts and tax increases. Using both ordered and unordered multinomial probit models, we corroborate that citizens tend to disapprove of retrenchment policies. However, the effect on citizens’ voting intentions varies depending on their political ideology. We confirm that left‐wing voters supporting the incumbent coalition parties prefer austerity policies based on the revenue side of the budget, while right‐wing voters tend to approve retrenchments based on the expenditure side to a larger extent.

Suggested Citation

  • Santiago Lago‐Peñas & María Cadaval‐Sampedro & Ana Herrero‐Alcalde, 2024. "Fiscal consolidation and voting: on the electoral costs of budgetary stability," Fiscal Studies, John Wiley & Sons, vol. 45(4), pages 559-581, December.
    • Handle: RePEc:wly:fistud:v:45:y:2024:i:4:p:559-581
    DOI: 10.1111/1475-5890.12364
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