IMF BLOG
Era Dabla-Norris, Enrico Di Gregorio, Yongquan Cao
September 16, 2024
Conservative politics has traditionally been defined by its emphasis on fiscal prudence and the idea of a small state while parties leaning left are usually associated with more spending and a larger presence of the state in the economy. The reality may be different though. As our new analysis shows, parties across the political spectrum sound increasingly similar when it comes to fiscal policy: they all campaign on ideas of a bigger government and promising more spending.
A comprehensive analysis of 65 advanced and emerging market countries over six decades shows that political discourse on fiscal issues has become increasingly favourable to higher government spending since the 1960s. From socialists to nationalists, support for more spending has steadily increased, while fiscal restraint rhetoric has lost favour across the board in the last three decades, after being most popular in the1980s.