Transition Countries in Turmoil: Citizen Preferences for Fiscal Redistribution in Times of Financial Crisis
Nuss, Suzanne Carolin
Kern, Andreas T
This paper analyzes the impact of financial crises on popular demands for fiscal redistribution in transition countries, looking in particular at how different factors in a crisis, such as the method of adjustment, hits to the household balance sheet, and regional differences affect citizens’ preferences for redistribution in these countries. Results of the analysis show that citizens demand more fiscal redistribution during crises. In addition, my findings indicate that external financial adjustments (e.g., currency depreciation) might be less painful to citizens than internal adjustments (e.g., cuts in government spending). The paper offers insights toward providing a better understanding of rising political discontent and extremism in Europe, and cautions the IMF and other financial institutions against fostering austerity, especially when the household sector is severely affected by the crisis. In fact, my findings support the notion that fiscal austerity might form the basis for political upheaval and radicalization.
Embargo Lift Date
Showing items related by title, author, creator and subject.
Are Economic Evaluations and Health Technology Assessments Increasingly Demanded in Times of Rationing Health Services? The Case of the Argentine Financial Crisis Rubinstein, Adolfo; Belizán, María; Discacciati, Vilda (2007-03)