The politics of social spending after the Great Recession: The return of partisan policy making

Abstract

Prior research shows that the effect of partisanship on social expenditure declined over time in Organisation for Economic Co-operation and Development (OECD) countries. In this article, the author argues that the 2007/2008 recession resulted in the reemergence of partisan policy making in social spending. This was a result of mainstream parties needing to respond to the growing challenge from nonmainstream parties as well as demonstrating that they responded to the economic crisis by offering different policy solutions. Using a panel of 23 OECD countries, the author shows that since the Great Recession, partisan effects on social spending are once again significant. These effects are more likely to be observed where the salience of the Left–Right dimension is higher. In accordance with classic theories of economic policy making, left-wing governments are more likely to increase social spending when unemployment is higher and right-wing governments restrain social expenditure when the budget deficit is greater.