Savings in Public Services after the Crisis: A Multilevel Analysis of Public Preferences in the EU27 (Working Paper 8)

Policy responses to the financial crisis can be divided into cyclical and anti-cyclical approaches. The former advocates reducing public spending in times of financial constraints. The latter approach advocates public spending to boost the economy. Using multinomial multilevel analysis on public opinion data from more than 20,000 respondents in the 27 EU member countries, we test a model for citizen preferences between reducing spending or savings in public services, and investing in measures to boost the economy. 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, as well as the respondent’s age, education and political orientation have the strongest effects on preferences. Macro-economic variables, such as a country’s government deficit level, public debt or public expenditure have, surprisingly, no effect on citizens’ financial policy preferences.