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The Political Causes and Effects of Fiscal Adjustments

Abstract

In this dissertation, I examine whether attributes of governments and political systems affect the accumulation of government debt in wealthy democracies, and whether voters hold governments accountable for fiscal outcomes. I begin by reevaluating the conclusions of prior research using alternative samples and model specifications. I find no consistent support for the hypotheses advanced in the most-cited papers on the topic. In the subsequent two chapters, I reexamine the electoral effects of macroeconomic and fiscal outcomes. I again find that the conclusions of the most-cited prior studies fail to reproduce out of sample and specification. However, I show that voters generally reward incumbent parties of the chief executive for economic growth and expansionary fiscal policies.

Turning from electoral effects to policy outcomes, I show that government cohesion has no non-negligible effect on changes in pension generosity in response to population aging. I then examine the relationship between fiscal constraints and welfare retrenchment. I show that support for welfare state expansion in the electoral manifestos of competitive and mainstream political parties increases with the government budget balance. To illustrate the importance of political and economic context in shaping the particular character of fiscal adjustments, I complete my empirical analysis with a case study of the austerity measures taken by the Cameron administration in the United Kingdom. I conclude the dissertation by advocating for greater research transparency. Researchers should acknowledge that many estimates presented in social-scientific studies are products of arbitrary or strategically chosen assumptions concerning sampling, measurement, and model specification.

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