Preferences and Priorities Towards Fiscal and Social Policies

Governments constantly face fiscal trade-offs. In times of permanent austerity, resources are scarce, which presents policymakers with difficult choices. Existing research suggests that citizens do not see these trade-offs: While they support higher levels of government spending, they do not want to pay for it through tax increases or debt. This creates a dilemma for politicians and political parties that have to square the circle when designing government budgets. Yet, public opinion research on fiscal policies tends to assess public opinion on individual policies independent of other fiscal policies. It does not capture the multidimensionality of fiscal policies and ignores that governments face fiscal trade-offs. Therefore, my research shifts the focus from studying peoples’ policy preferences towards studying peoples’ priorities.

Using novel survey experiments conducted in four European countries (Germany, Italy, Spain, and the UK), Reto Bürgisser and I analyzed public opinion towards fiscal policies (including government spending, taxation, and government debt) and social policies (including various forms of social investment and social consumption). Our approach makes budgetary trade-offs binding and avoids “free lunches” while still measuring support for expansion or retrenchment. This allows us to study people’s relative priorities across fiscal and social policies in the face of multidimensional trade-offs. The first article based on this research shows that citizens care little about government debt: fiscal consolidation at the cost of spending cuts or taxes hikes is less popular than commonly assumed. The second article shows that welfare state recalibration is difficult because the associated trade-offs are unpopular, and distributive conflicts in mature welfare states are mainly about distributing resources to specific social groups. A related article, co-authored with Marius Busemeyer, further shows that people who traditionally support a large public sector and more welfare state spending tend to oppose redistributing spending towards social investment. This research, therefore, helps to explain both why fiscal consolidation is electorally contested and why welfare state recalibration remains an uphill battle.

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