Document Type


Publication Date

Summer 2015

Publication Citation

22 Indiana Journal of Global Legal Studies 433 (2015)


Daunting fiscal policy challenges face democratic systems throughout the world. Fiscal austerity in the wake of the Great Recession prompted nations in the Organisation for Economic Co-operation and Development (OECD) to institute major spending cuts and tax increases, increases that caused political and social fallout for years to come. While economies and budgets have improved in the past several years, significant fiscal adjustments lie ahead due to aging populations and the seemingly inexorable growth of health care costs. Faced with larger cohorts of retirees and fewer workers, nations will have to come to grips with a fiscal reality of higher spending and lower revenues for the foreseeable future. This article examines whether and how fiscal austerity measures are politically stabilizing or destabilizing for elected leaders responsible for their imposition. Many would predict that democracies are ill suited to make these hard choices, and certainly regimes have gone down to defeat following the formulation of austerity programs. However, the record is mixed-many regimes have found strategies to mitigate the political fallout and guarantee reelection in the wake of austerity. While traditional incremental and pluralist politics continue to characterize the budgetary strategies of many systems, major policy reforms have risen to the center of policy agendas elsewhere. While the magnitude of the fiscal crisis prompted the adoption of major policy shifts in hard-pressed nations, such reforms were undergirded by a more volatile policy process featuring the emergence of new pathways to power with greater roles for experts and symbolically compelling ideas.