Governments have great difficulties to design politically sustainable responses to rising public debt. These difficulties are grounded in a limited understanding of the popular constraints during times of fiscal pressure. For instance, an influential view claims that fiscal austerity does not...

The European debt crisis has uncovered a serious tension between democratic politics and market pressure in contemporary democracies. This tension arises when governments implement unpopular fiscal consolidation packages in order to raise their macroeconomic credibility among financial...

Why do some countries run persistent current account surpluses? Why do others run deficits, often over decades, leading to enduring global imbalances? Such persistent imbalances are the root cause of many financial crises and a major source of international economic conflict. We propose that...

Governments often pursue procyclical fiscal policies, even though they reduce voter welfare. Is this because voters actually prefer procyclical policies? The analysis in this paper exploits the first individual-level evidence from an original survey of 12,000 respondents in 8 countries across...

We analyze democratic accountability in open economies based on different hypotheses about political evaluations and government responsiveness. Specifically, we assess whether citizens primarily rely on government policies or if they focus on economic outcomes resulting from these policies to...