'Surgery without Anaesthetics' or 'Boiling Frogs'?
A second key political choice in fiscal squeeze concerns depth and timing. Most commentators on retrenchment politics draw some distinction between 'decremental' and more selective or abrupt approaches, particularly over spending (for instance Dunsire and Hood 1989; Kickert and Randma-Liiv 2015). And, though less often mentioned, exactly the same choice in principle arises over tax hikes. Governments have the option of a 'surgery without anaesthetics' approach, in which speed is of the essence to avoid the patient dying of shock, and the more gradual approach represented by the well- known (but contestable) idea that a frog can eventually be boiled alive if placed in a pan of water that is then heated very slowly.
Again, that choice is central to fiscal squeeze politics, sometimes playing out within a single party in government (as it did for the Conservatives in the 1980s and 1990s) and sometimes dividing competing parties, as in 2010, when the Conservatives proposed a plan to start early and eliminate the post-2008 deficit within five years, while the other major parties offered plans to do so in slower-onset manner over two electoral terms.
In general, issues of length, timing, and sequencing have not been much pronounced upon by economists studying fiscal austerity (Alesina et al. 2015: 383), in contrast to the intense discussions about the rival merits of 'big bang' and 'gradualist' approaches in other contexts, such as the 1990s 'transition' literature on the transformation of former Soviet economies (Tanzi 1993). But politically, a choice between 'surgery without anaesthetics' and 'boiling frogs' involves important trade-offs, as Paul Pierson and others have noted. 'Surgery without anaesthetics' has the potential advantage of concentrating the voters' pain at a politically opportune point in the electoral cycle, linking with the idea of 'political business cycles' in which incumbents hike taxes and cut spending in the aftermath of electoral victories, and do the reverse in the run-up to the following election (Lewin 1991). Such a strategy applied to fiscal squeeze in principle gives incumbent parties a chance to recover in the polls as voters' memories of loss are overlaid by later events before the next key election, but has the corresponding disadvantage of being more likely to mobilize massive resistance by those on whom the losses are imposed. By contrast, the 'boiling frogs' approach has the advantage of making losses less visible and consequently reducing the risk that losers will mobilize to resist them, but again has corresponding disadvantages. Such changes are easier to reverse than radical surgery, their immediate pay-offs are lower, and they provide political opponents with continuing opportunities to alert voters to the losses being imposed on them (Pierson 1994: 20ff.), as happened to the Conservatives in the 1990s after a budget that aimed to spread the pain of tax increases over three years.
So when and why do governments choose the 'surgery without anaesthetics' approach over the 'boiling frogs' approach, and how can we explain why the balance between the two approaches seems to have shifted between the former in the first third of the century under consideration to the latter in the final third?