The Impact of Austerity on Voting Behaviour: Evidence from Romania

This paper analyzes the electoral consequences of austerity in Romania, a country severely affected by the 2008 crisis. Based on original survey data and using nonlinear difference-in-differences models to enhance confidence in the causal inferences, I show that austerity measures trigger a massive and generalized punishment for the incumbent. I further show that the effect is driven by those who had voted for the party in power only a few months before. There is no evidence that those more directly affected by the spending cuts (public employees, the unemployed, and pensioners) punish the incumbent party more than those less affected (private sector workers). Austerity leads to the demobilization of the governing party’s supporters and a decline in support among the incumbent’s past voters. The announcement of austerity measures is enough to trigger electoral punishment; the impact of the actual implementation is non-significant. Based on Markov-switching models, a time-series analysis shows that, despite voters’ perceptions of the economy improving, the incumbent’s support never recovers. The analysis contributes to the literature on the electoral consequences of austerity and provides new insights into voters’ reactions to economic downturns. I also offer a deep exploration of the economic crisis in an Eastern European setting and, in contrast to previous findings mostly highlighting the importance of perceived corruption for electoral outcomes in the region, I make the case for the substantial role of the economy.