Politics In and After Fiscal Squeeze
Politics In and After Fiscal Squeeze
This chapter examines what nine cases of fiscal squeeze in different democracies can reveal about the politics of austerity, combining overall quantitative comparisons with a set of qualitative accounts of those nine cases. It argues that fiscal squeeze in democracies is not invariably prompted by economic force majeure, contrary to the view that public spending growth in democracies can only be checked by exogenous forces or constitutional entrenchment. It further argues that there is no standard set of economic and financial preconditions for fiscal adjustment or consolidation, and that while fiscal squeeze often presents blame-avoidance challenges for incumbents, such squeezes do not necessarily produce deep political crisis or political violence. Nor are they invariably marked by major political turning-points or political cross-dressing in the form of ‘Nixon goes to China’ moments. The chapter concludes by reflecting on what policymakers in the next set of fiscal squeezes can and cannot learn from comparative experience.
Keywords: Fiscal squeeze, public spending growth, democracy, preconditions, political crisis, politics of austerity, constitutional entrenchment, fiscal consolidation, fiscal adjustment, blame avoidance
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