When the Party’s Over

This book develops a framework for analysing the politics of ‘fiscal squeeze,’ defined as political effort to cut spending and increase taxes to correct the public finances—a theme which has dominated the politics of many of the world’s democracies in the 2010s. The book poses three questions about the politics of fiscal squeeze in democracies, namely what if anything is special about the politics of austerity or retrenchment, whether fiscal squeeze presents credit-claiming opportunities or severe blame-avoidance challenges to elected governments, and whether fiscal squeezes are highly consequential in their effects. To explore those questions, it examines nine cases of fiscal squeeze in democracies in different times and places, ranging from the early United States in the 1830s/40s (when half of the states then in the Union defaulted) to the squeeze following the 2001 Argentinian default and devaluation. The cases explored are sufficiently far back in time for an assessment of their consequences to be made and the analysis combines systematic quantitative comparison with in-depth qualitative study of each case by leading country experts. The analysis shows there is no single set of preconditions for fiscal squeeze and that the political consequences of such squeezes—for example, in who got political blame or credit and the longer-term effects on politics and government—were highly variable in these nine cases. The book argues that ‘how to do it’ approaches to fiscal squeeze in democracies, based on apparently successful cases, often fail to take into account profound differences in circumstances.