Populism and the Economics of Globalization

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Populism and the Economics of Globalization

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Populism and the Economics of Globalization

01 Jan 2017-National Bureau of Economic Research (National Bureau of Economic Research, Inc)-

TL;DR: The authors argue that economic history and economic theory both provide ample grounds for anticipating that advanced stages of economic globalization would produce a political backlash, and distinguish between left-wing and right-wing variants of populism, which differ with respect to societal cleavages that populist politicians highlight.

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Abstract: Populism may seem like it has come out of nowhere, but it has been on the rise for a while. I argue that economic history and economic theory both provide ample grounds for anticipating that advanced stages of economic globalization would produce a political backlash. While the backlash may have been predictable, the specific form it took was less so. I distinguish between left-wing and right-wing variants of populism, which differ with respect to the societal cleavages that populist politicians highlight. The first has been predominant in Latin America, and the second in Europe. I argue that these different reactions are related to the relative salience of different types of globalization shocks.

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Journal Article•DOI•

The European Trust Crisis and the Rise of Populism

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Yann Algan, Sergei Guriev, Elias Papaioannou, Evgenia Passari

22 Sep 2017-Sciences Po publications

TL;DR: In this paper, the authors study the implications of the Great Recession for voting for anti-establishment parties, as well as for general trust and political attitudes, using regional data across Europe and find a strong relationship between increases in unemployment and voting for non-mainstream parties, especially populist ones.

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Abstract: We study the implications of the Great Recession for voting for antiestablishment parties, as well as for general trust and political attitudes, using regional data across Europe. We find a strong relationship between increases in unemployment and voting for nonmainstream parties, especially populist ones. Moreover, unemployment increases in tandem with declining trust toward national and European political institutions, though we find only weak or no effects of unemployment on interpersonal trust. The correlation between unemployment and attitudes toward immigrants is muted, especially for their cultural impact. To explore causality, we extract the component of increases in unemployment explained by the precrisis structure of the economy, in particular the share of construction in regional value added, which is strongly related both to the buildup preceding and the bursting of the crisis. Our results imply that crisis- driven economic insecurity is a substantial determinant of populism and political distrust.

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346 citations

Journal Article•DOI•

Right-wing populism and the climate change agenda: exploring the linkages

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Matthew Lockwood¹•Institutions (1)

University of Exeter¹

03 Apr 2018-Environmental Politics

TL;DR: The rise of right-wing populism poses a challenge for the climate agenda, as leaders and supporters tend to be climate sceptics and hostile to policy prescribing action on climate change as mentioned in this paper.

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Abstract: The rise of right-wing populism (RWP) poses a challenge for the climate agenda, as leaders and supporters tend to be climate sceptics and hostile to policy prescribing action on climate change. How...

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254 citations

Cites background from "Populism and the Economics of Globa..."

...…male, industrial and manufacturing workers and those in less skilled whitecollar occupations – whose jobs, incomes and wider economic security have been most eroded by processes of globalisation, automation and de-unionisation (e.g. Bornschier and Kriesi 2012, Ford and Goodwin 2014, Rodrik 2017)....
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...It is thus in principle possible to distinguish, for example, between RWP, which is typically nativist and socially authoritarian, while often also economically interventionist (e.g. Mudde 2007, Golder 2016, Rodrik 2017), and left-wing populism (LWP), which is more socially liberal and universalist....
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...In this approach, which may be termed ‘structuralist’, emphasis is given to the fact that RWP parties have had particular appeal amongst those – especially male, industrial and manufacturing workers and those in less skilled whitecollar occupations – whose jobs, incomes and wider economic security have been most eroded by processes of globalisation, automation and de-unionisation (e.g. Bornschier and Kriesi 2012, Ford and Goodwin 2014, Rodrik 2017)....
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...This was in part because of the particular context of the European Union, but mainly because the leadership of the centre-right Conservative Party, having moved the party in a more liberal and cosmopolitan direction in the 2000s, was resistant to adopting mainstream populism in the 2010s, thereby opening up a space on the right (Ford and Goodwin 2014)....
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...Unions have become weaker, and mainstream political parties have become more technocratic and converged on a centre-right policy agenda aimed at middle-class voters, creating a cartelisation of politics (Blyth 2003, Ford and Goodwin 2014, Evans and Tilley 2017)....
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Journal Article•DOI•

De-globalization: Theories, predictions, and opportunities for international business research

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Michael A. Witt¹•Institutions (1)

INSEAD¹

04 Apr 2019-Journal of International Business Studies

TL;DR: In this article, the authors introduce two relevant theories of de-globalization from political science, liberalism and realism, and discuss the resulting opportunities in three areas of IB research: political strategies and roles of multinational enterprises (MNEs), global value chains, and the role of the national context.

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Abstract: De-globalization, now a distinct possibility, would induce a significant qualitative shift in strategies, structures, and behaviors observable in international business (IB). Coming to terms with this qualitative shift would require IB research to develop a much deeper integration of politics, the key driver of de-globalization. To support such integration, this paper introduces two relevant theories of (de-)globalization from political science, liberalism and realism. Both predict de-globalization under current conditions but lead to different expectations about the future world economy: liberalism suggests a patchwork of economic linkages, while realism predicts the emergence of economic blocs around major countries. This paper discusses the resulting opportunities in three areas of IB research: political strategies and roles of multinational enterprises (MNEs), global value chains, and the role of the national context. For political strategies and roles, there is a need to explore how regular business activities and deliberate political agency of MNEs affect the political sustainability of globalization. For value chains, questions include their future reach and specialization, changes in organizational forms, and the impact of political considerations on location decisions. Research opportunities on national contexts relate to their ability to sustain globalization and their connection with economic and military power.

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243 citations

Cites background from "Populism and the Economics of Globa..."

...Arguably, this accounts at least partially for the election of Donald Trump as U.S. President and the global rise of populism more generally (Rodrik, 2018)....
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...The latter reinforced support of right-wing nationalist groups linking globalization to unwelcome immigration (Rodrik, 2018), which seems to have played a role in the Brexit vote of 2016....
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Journal Article•DOI•

The geography of EU discontent

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Lewis Dijkstra, Hugo Poelman, Andrés Rodríguez-Pose¹•Institutions (1)

London School of Economics and Political Science¹

02 Jun 2020-Regional Studies

TL;DR: Support for parties opposed to European Union (EU) integration has risen rapidly, and a wave of discontent has taken over the EU as discussed by the authors. This discontent is purportedly driven by the very factors behind th...

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Abstract: Support for parties opposed to European Union (EU) integration has risen rapidly, and a wave of discontent has taken over the EU. This discontent is purportedly driven by the very factors behind th...

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228 citations

Cites background from "Populism and the Economics of Globa..."

...Migration is probably chief among them as it makes – together with a rejection of European integration – the core of many anti-system party manifestos (Becker et al., 2017; Ford & Goodwin, 2017; Goodwin & Heath, 2016; Goodwin & Milazzo, 2017; Hobolt, 2016; Lee et al., 2018; Rodrik, 2018)....
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...Formal education – or, more exactly, a relative lack of it – is also considered a key source of the anti-system vote (Antonucci, Horvath, Kutiyski, & Krouwel, 2017; Becker, Fetzer, & Novy, 2017; Bonikowski, 2017; Essletzbichler et al., 2018; Gordon, 2018; Hobolt, 2016; Lee, Morris, & Kemeny, 2018; Rodrik, 2018; Tyson & Maniam, 2016)....
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...Recently, there has been a stream of explanations focusing on economic decline (Becker et al., 2017; Essletzbichler et al., 2018; Goodwin & Heath, 2016; Johnson, 2015; Martin et al., 2018; Rodrik, 2018; Shafique, 2016; Tyson & Maniam, 2016)....
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...Parties on the extreme right and left of the political spectrum agree in portraying ‘the faceless bureaucrats of Brussels as the “other”’ (Rodrik, 2018, p. 24)....
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...Cultural fears connected with a supposed dilution of local or national identity as a result of the arrival of Muslim or Roma immigrants (Rodrik, 2018) or with a dilution of local distinctiveness in multiculturalism (Hobolt, 2016)....
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Journal Article•DOI•

Post-pandemic transformations: How and why COVID-19 requires us to rethink development.

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Melissa Leach¹, Hayley MacGregor¹, Ian Scoones¹, Annie Wilkinson¹•Institutions (1)

University of Sussex¹

01 Feb 2021-World Development

TL;DR: It is argued that the origins, unfolding and effects of the COVID-19 pandemic require analysis that addresses both structural political-economic conditions alongside far less ordered, ‘unruly’ processes reflecting complexity, uncertainty, contingency and context-specificity.

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209 citations

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References

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Open Access

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Book•DOI•

This Time Is Different: Eight Centuries of Financial Folly

[...]

Carmen Reinhart, Kenneth Rogoff

11 Sep 2009-Research Papers in Economics

TL;DR: This Time Is Different as mentioned in this paper presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes.

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Abstract: Throughout history, rich and poor countries alike have been lending, borrowing, crashing--and recovering--their way through an extraordinary range of financial crises. Each time, the experts have chimed, "this time is different"--claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters. With this breakthrough study, leading economists Carmen Reinhart and Kenneth Rogoff definitively prove them wrong. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes--from medieval currency debasements to today's subprime catastrophe. Carmen Reinhart and Kenneth Rogoff, leading economists whose work has been influential in the policy debate concerning the current financial crisis, provocatively argue that financial combustions are universal rites of passage for emerging and established market nations. The authors draw important lessons from history to show us how much--or how little--we have learned. Using clear, sharp analysis and comprehensive data, Reinhart and Rogoff document that financial fallouts occur in clusters and strike with surprisingly consistent frequency, duration, and ferocity. They examine the patterns of currency crashes, high and hyperinflation, and government defaults on international and domestic debts--as well as the cycles in housing and equity prices, capital flows, unemployment, and government revenues around these crises. While countries do weather their financial storms, Reinhart and Rogoff prove that short memories make it all too easy for crises to recur. An important book that will affect policy discussions for a long time to come, This Time Is Different exposes centuries of financial missteps.

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4,595 citations

"Populism and the Economics of Globa..." refers background in this paper

...The canonical chart on this comes from Reinhart & Rogoff (2009), who show that the time trends of financial globalization and the incidence of banking crises coincidence coincide almost perfectly....
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Journal Article•DOI•

International regimes, transactions, and change: embedded liberalism in the postwar economic order

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John Gerard Ruggie¹•Institutions (1)

Rockefeller Foundation¹

01 Mar 1982-International Organization

TL;DR: In this paper, the authors argue that the prevailing view of international economic regimes is strictly positivistic in its epistemological orientation and stresses the distribution of material power capabilities in its explanatory logic.

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Abstract: The prevailing model of international economic regimes is strictly positivistic in its epistemological orientation and stresses the distribution of material power capabilities in its explanatory logic. It is inadequate to account for the current set of international economic regimes and for the differences between past and present regimes. The model elaborated here departs from the prevailing view in two respects, while adhering to it in a third. First, it argues that regimes comprise not simply what actors say and do, but also what they understand and find acceptable within an intersubjective framework of meaning. Second, it argues that in the economic realm such a framework of meaning cannot be deduced from the distribution of material power capabilities, but must be sought in the configuration of state-society relations that is characteristic of the regime-making states. Third, in incorporating these notions into our understanding of the formation and transformation of international economic regimes, the formulation self-consciously strives to remain at the systemic level and to avoid becoming reductionist in attributing cause and effect relations. The article can therefore argue that the prevailing view is deficient on its own terms and must be expanded and modified. Addressing the world of actual international economic regimes, the article argues that the pax Britannica and the pax Americana cannot be equated in any meaningful sense, and that the postwar regimes for money and trade live on notwithstanding premature announcements of their demise.

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3,295 citations

"Populism and the Economics of Globa..." refers background in this paper

...30The term ‘‘embedded liberalism’’ was coined by Ruggie (1982), who remains the best exponent of the regime it describes....
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Journal Article•DOI•

The China Syndrome: Local Labor Market Effects of Import Competition in the United States

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David H. Autor¹, David Dorn², Gordon H. Hanson•Institutions (2)

Massachusetts Institute of Technology¹, CEMFI²

01 Oct 2013-The American Economic Review

TL;DR: This paper analyzed the effect of Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross-market variation in import exposure stemming from initial diffe cerence to US labor markets.

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Abstract: We analyze the effect of rising Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross-market variation in import exposure stemming from initial diffe...

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2,818 citations

"Populism and the Economics of Globa..." refers background or methods or result in this paper

...Using an Autor et al. (2013)- type China trade shock variable, they show regions with larger import penetration from China had a higher Leave vote share....
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...Beyond redistributive costs, Autor et al. (2013) point also to the adverse efficiency implications of these findings....
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...Analyzing electoral results across US congressional districts, Autor et al. (2016a, b) have shown that the China trade shock aggravated political polarization: districts affected by the shock moved further to the right or the left, depending which way they were leaning in the first place. Elected Republicans became more conservative, while elected Democrats became more liberal. For Britain, Becker et al. (2016) find that austerity and immigration impacts both played a role in increasing the Brexit vote, in addition to demographic variables and industrial composition....
[...]
...Analyzing electoral results across US congressional districts, Autor et al. (2016a, b) have shown that the China trade shock aggravated political polarization: districts affected by the shock moved further to the right or the left, depending which way they were leaning in the first place. Elected Republicans became more conservative, while elected Democrats became more liberal. For Britain, Becker et al. (2016) find that austerity and immigration impacts both played a role in increasing the Brexit vote, in addition to demographic variables and industrial composition. Also analyzing Brexit, Colantone & Stanig (2016) find a much more direct role for globalization. Using an Autor et al. (2013)type China trade shock variable, they show regions with larger import penetration from China had a higher Leave vote share. They also corroborate this finding with individual-level data from the British Election Survey that shows individuals in regions more affected by the import shock were more likely to vote for Leave, conditional on education and other characteristics. A second paper by Colantone & Stanig (2017) undertakes a similar analysis for 15 European countries over the 1988–2007 period....
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...Analyzing electoral results across US congressional districts, Autor et al. (2016a, b) have shown that the China trade shock aggravated political polarization: districts affected by the shock moved further to the right or the left, depending which way they were leaning in the first place. Elected Republicans became more conservative, while elected Democrats became more liberal. For Britain, Becker et al. (2016) find that austerity and immigration impacts both played a role in increasing the Brexit vote, in addition to demographic variables and industrial composition. Also analyzing Brexit, Colantone & Stanig (2016) find a much more direct role for globalization....
[...]

Posted Content•

Why Do More Open Economies Have Bigger Governments

[...]

Dani Rodrik

01 May 1996-Research Papers in Economics

TL;DR: The authors showed that there is a robust empirical association between the extent to which an economy is exposed to trade and the size of its government sector, and that government consumption plays a risk-reducing role in economies exposed to a significant amount of external risk.

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Abstract: This paper demonstrates that there is a robust empirical association between the extent to which an economy is exposed to trade and the size of its government sector. This association holds for a large cross-section of countries, in low- as well as high-income samples, and is robust to the inclusion of a wide range of controls. The explanation appears to be that government consumption plays a risk-reducing role in economies exposed to a significant amount of external risk. When openness is interacted with explicit measures of external risk, such as terms-of-trade uncertainty and product concentration of exports, it is the interaction terms that enter significantly, and the openness term that loses significance (or turns negative). The paper also demonstrates that government consumption is the ‘safe’ activity, in the empirically relevant sense, in the vast majority of countries.

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2,622 citations

Book•

Spheres Of Justice: A Defense Of Pluralism And Equality

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Michael Walzer

24 Sep 1984

TL;DR: In this paper, complex equality, membership, security and welfare, money and commodities, office, hard work, free time, education, kinship and love, recognition, political power, Tyrannies and just societies.

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Abstract: * Complex Equality * Membership * Security and Welfare * Money and Commodities * Office * Hard Work * Free Time * Education * Kinship and Love * Divine Grace * Recognition * Political Power * Tyrannies and Just Societies

...read moreread less

2,529 citations

"Populism and the Economics of Globa..." refers background in this paper

...12The term ‘‘blocked exchange’’ comes from Walzer (1983) and refers to things that cannot be bought or sold because of moral stigma or legal strictures....
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