Policy Design and Domestic Support for International Bailouts
Michael M. Bechtel
University of St.Gallen
Stanford University - Department of Political Science; Stanford Graduate School of Business
Yotam M. Margalit
Financial bailouts for ailing Eurozone countries face deep and widespread opposition among voters in donor countries, casting major doubts over the political feasibility of further assistance efforts. What is the nature of the opposition and under what conditions can governments obtain broader political support for funding such large-scale, international transfers? Addressing this question, we distinguish theoretically between 'fundamental' versus 'contingent' attitudes. Whereas the former entails complete rejection or embrace of a policy, contingent attitudes depend on the specific features of the policy and could shift if those features are altered. Combining unique data from an original survey in Germany, the largest donor country, together with a conjoint experiment that varies salient policy dimensions, our analysis indicates that only 23% of the public exhibits fundamental opposition to the bailouts. Testing a set of theories on contingent attitudes, we find particular sensitivity to burden-sharing features of the bailouts, spanning both the absolute and relative distribution of the costs. Our results imply that the choice of specific policy features has major implications for building domestic support for contributions to international assistance efforts.
Number of Pages in PDF File: 44
Keywords: bailouts, Eurozone, public opinion, conjoint analysis
JEL Classification: F5, P16, F34, D72
Date posted: October 19, 2012 ; Last revised: April 14, 2015
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