Is Cutting the Deficit an Electoral Loser?

Here is an NBER article I hope all presidential candidates read:

The conventional wisdom regarding the political consequences of large reductions of budget deficits is that they are very costly for the governments which implement them: they are punished by voters at the following elections. In the present paper, instead, we find no evidence that governments which quickly reduce budget deficits are systematically voted out of office in a sample of 19 OECD countries from 1975 to 2008.  We also take into consideration issues of reverse causality, namely the possibility that only “strong and popular” governments can implement fiscal adjustments and thus they are not voted out of office “despite” having reduced the deficits.  In the end we conclude that many governments can reduce deficits avoiding an electoral defeat.

Alesina described similar findings in his 2010 Mercatus Working paper. There he wrote:

One of the most striking results of Alesina and Ardagna (2010) is that fiscal adjustments (reductions) on the spending side are almost as likely to be associated with high growth (i.e. a successful episode) as fiscal expansions on the spending side,