Social Democratic Austerity

Abstract Chapter 2 situates the book in the context of the existing literature and outlines the analytical framework. The chapter begins by reviewing the policies that the centre-left pursued before the Great Recession. Afterwards, it summarises existing explanations for social democratic austerity and argues that they are not sufficient to explain it. The chapter then provides a new theoretical framework to explain partisan choices for macroeconomic policies. It argues that politicians are constantly in search of electoral majorities and need to respond to public opinion. Yet, parties in Europe are not just conveyor belts for electoral interests; they are also rooted in distinct ideological traditions. Parties balance electoral demands with their economic ideas and political objectives. The theoretical framework, therefore, highlights the importance of both the electoral and ideational foundations of macroeconomic policies and focuses on the interaction of public opinion, economic ideas, and the dominant political discourse.