Does Austerity Cause Political Polarization and Fragmentation

Most party systems have seen a considerable rise in polarization and fragmentation during the past decades. We show that fiscal policies contributed to this development. Our macro-level analysis of 163 elections since 1979 finds that austerity increases both electoral abstention and votes for non-mainstream parties, thereby boosting polarization and the effective number of parties. A detailed analysis of selected fiscal adjustments also finds that new, small and radical parties benefit most from austerity policies. Survey experiments with a total of 8,800 respondents in Germany, Portugal, Spain and the United Kingdom show why this is the case. If the mainstream right and left parties both propose a pro-austerity position, more voters turn towards non-mainstream parties than if the mainstream left or both mainstream parties oppose austerity. Therefore, the adoption of similar economic positions by mainstream parties is a major determinant of political destabilization in industrialized democracies.