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Austerity and the path of least resistance

How Fiscal Consolidations Crowd Out Long-Term Investments

Datos Bibliográficos

ID6291520
AutoresOlivier Jacques (0000-0002-3864-1773, McGill University, autor de correspondencia)
Año2021
Volumen28
Número4
Páginas551-570
Fecha de publicación2021-04-03
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaJournal of European Public Policy (JOURNAL)
Identificadores de la revistaISSN: 1350-1763 • E-ISSN: 1466-4429
EditorialInforma UK Limited (PUBLISHER • GB)
DOI10.1080/13501763.2020.1737957
OpenAlexW3011208377
IdiomaEN
Citas recibidas28
Referencias citadas42

What policies do government prioritize when they implement austerity? I argue that governments choose the path of least resistance when they engage in fiscal consolidations. Positive policy feedback protects programmes from retrenchment when they cover large segments of the population. In contrast, policies involving discounting short-term benefits for long-term gains are more exposed to austerity as they are subject to an intertemporal trade-off. Using a compositional dependent variable analysis in 17 OECD countries from 1980 to 2014, I show that austerity, measured with the narrative approach to fiscal consolidations, is associated with a decrease in the proportion of public investment in research and development and gross fixed capital formation and an increase in health care and pensions' proportion of budgets. The budget shares of human capital investments in education, childcare and active labour market policies and of compensatory transfer-based labour market insurance are resilient to austerity

Austerity · Economic policy · Economics · Fiscal policy · Labour economics · Macroeconomics · Monetary economics · Political science · Population · Public capital · Public investment · Retrenchment · Global Health Care Issues · Housing, Finance, and Neoliberalism · Social Policy and Reform Studies

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Obras citantes distintas28
Citas por año4,67
Intervalo de citas2020 - 2026 (7)
Velocidad de citacióncurrent
Altamente citadoNo
Tipos de citaNeutras: 28
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