A large literature explains the rise of populist parties with the economic insecurities stemming from globalization and technological change. But despite the long-standing focus of the comparative and international political economy literature on fiscal policy, these studies largely ignore governments and their economic policies. This article brings policy back into the picture by reviewing the research agenda on the political effects of fiscal policy, and fiscal austerity in particular. This research finds that governments, especially those with a large electoral margin, can implement austerity and still survive in office. Support for austerity varies with the composition of the austerity package, the public discourse, and the narratives to which voters are exposed. Nonetheless, austerity has important political effects even if governments do not collapse: They increase votes for nonmainstream, often populist, parties among economically vulnerable voters because austerity magnifies rather than alleviates the social risks of these voters.