Savings in public services after the crisis: a multilevel analysis of public preferences in the EU-27

Abstract

Policy responses to the global financial crisis can be divided into pro- and counter-cyclical approaches. The former advocates reducing public spending in times of financial constraints. The latter approach advocates public spending to boost the economy. Using public opinion ( N = 23,652) data from 27 EU member countries, we empirically test a model for citizen preferences for reducing spending in public services versus government investment in measures to boost the economy as a response to the financial crisis. We look at individual- and country-level determinants of attitudes to savings in public services, and concentrate on four groups of explanations: political disaffection, ideology, self-interest, and macro-economic conditions. It was found that political disaffection and the respondent’s ideological orientation both have effects on preferences, as well as whether one experiences economic strain or receives welfare services. Macro-economic conditions, such as a country’s government deficit level, public debt or public expenditure have, surprisingly, no effect on citizens’ financial policy preferences. We discuss the implications of our results for public administration theory and practice. Points for practitioners The article analyses citizens’ preferred government reactions to the financial crisis. It distinguishes between reducing public spending and measures to boost the economy. It was found that macro-economic conditions matter very little for these preferences. In fact, explanations for these attitudes and preferences need to be looked for primarily at the individual level, not the country level. Preferences for or against savings in public services are largely influenced by ideological dispositions, age, education, overall levels of political trust, and whether citizens are (potential) beneficiaries of welfare services. The article contributes to understanding why citizens support or oppose pro- or counter-cyclical policy measures to emerge from the crisis.