Sharing the Pain: Explaining Public Opinion Towards International Financial Bailouts
Michael M. Bechtel
University of St. Gallen, Department of Political Science
Massachusetts Institute of Technology (MIT) - Department of Political Science
Yotam M. Margalit
April 1, 2012
MIT Political Science Department Research Paper No. 2012-5
Why do voters agree to bear the costs of bailing out other countries? Despite the prominence of public opinion in the ongoing debate, voters’ preferences on the eurozone bailouts are poorly understood. Our analysis uses observational and experimental data from Germany, the country shouldering the largest share of the EU's financial rescue fund. We find that while the economic features of the bailout package itself strongly affect voters' willingness to support the transfers, individuals' own economic standing has limited explanatory power in accounting for their position on the bailouts. In contrast, social dispositions such as altruism and cosmopolitanism are robustly associated with support for the bailouts. The results indicate that the current divide in public opinion over the bailouts is less along distributive lines between domestic winners and losers, but better understood as a foreign policy issue that pits economic nationalist sentiments versus greater cosmopolitan affinity and other-regarding concerns.
Number of Pages in PDF File: 51
Keywords: EU, bailouts, public opinion, political behaviour, redistribution
JEL Classification: F5, P16, F34, D72working papers series
Date posted: April 1, 2012 ; Last revised: April 3, 2012
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