IMF Working Papers

Perceptions of Public Debt and Policy Expectations: Evidence from Cross Country Surveys

By Francesco Bianchi, Era Dabla-Norris, Salma Khalid

September 29, 2025

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Format: Chicago

Francesco Bianchi, Era Dabla-Norris, and Salma Khalid. "Perceptions of Public Debt and Policy Expectations: Evidence from Cross Country Surveys", IMF Working Papers 2025, 197 (2025), accessed September 29, 2025, https://doi.org/10.5089/9798229025751.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Utilizing surveys of over 27,000 respondents from 13 advanced and emerging market economies, we explore how knowledge and beliefs about government debt influence expectations of tax and expenditure policy changes. Individuals systematically underestimate debt levels, especially in high-debt countries, and believe that the burden of fiscal adjustments will disproportionately affect them. Greater lifetime exposure to fiscal consolidation increases pessimism about future economic prospects, diminishes trust in government, and is associated with expectations of higher debt, future taxes increases and spending cuts, and inflation. Informing respondents about their country’s debt levels reduces expectations of tax increases in stable debt contexts and raises expectations of spending cuts in countries with rising debt with the influence of this information moderated by individuals’ past experiences with fiscal consolidation.

Subject: Aging, Expenditure, Fiscal consolidation, Fiscal policy, Government debt management, Population and demographics, Public debt, Public financial management (PFM), Revenue administration

Keywords: Aging, Behavioral economics, Fiscal consolidation, Fiscal policy, Government debt management, Lifetime experiences, Public debt

Publication Details

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