| Budget Amount *help |
¥4,680,000 (Direct Cost: ¥3,600,000、Indirect Cost: ¥1,080,000)
Fiscal Year 2015: ¥1,430,000 (Direct Cost: ¥1,100,000、Indirect Cost: ¥330,000)
Fiscal Year 2014: ¥2,080,000 (Direct Cost: ¥1,600,000、Indirect Cost: ¥480,000)
Fiscal Year 2013: ¥1,170,000 (Direct Cost: ¥900,000、Indirect Cost: ¥270,000)
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| Outline of Final Research Achievements |
Why do governments engage in fiscal restraint even during recessions in spite of increasing unemployment? This paper presents an explanation that focuses on the party leaders’ motives to obtain government power by winning elections. We posit that mainstream party leaders endorse fiscal restraint to indicate their economic competence, justifying it as something necessary to realize stable growth in a world of mobile capital, which is indicated by the rightwards move of the mainstream parties (of both the right and the left) in the post-recession elections. To enhance their reputation, government leaders also seek legislative alliances to pass austerity bills, resulting in policy changes that are closer to the legislative preference than the government one and in stronger dependence on expenditure cuts than politically divisive tax reforms. Our expectation is corroborated by panel analysis of 20 OECD countries and case studies of unexpected reform episodes.
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