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Globalization's losers: International economic integration and the politics of discontentYotam Margalit
This dissertation contains three essays that deal with the political consequences of globalization. More specifically, these essays examine the constituency of globalization's losers, those that feel harmed by their country opening up to the international economy. The key question underlying this research is the political response of the losers: why is it that in some countries they vote for parties that offer economic protection, but in other countries for parties that center on non-economic appeals such as religion, traditionalism or nationalism. The three essays develop the argument that opposition to economic globalization is, to an important extent, driven not only by its distributive consequences, but also by anxiety about some of the social and cultural consequences that people associate with growing economic openness. The argument implies that the losers are characterized by shared policy preferences on the economic dimension, but also on a second, social-cultural dimension. The way in which preferences along these two dimensions (economic and cultural) translate into vote choice varies largely as a function of the constraints imposed by the electoral rules in place. Each of the essays develops and empirically tests the different components of this argument. The first essay asks who the losers are, and empirically investigates the sources of people's sense of being harmed by economic globalization. The analysis demonstrates that traditional political economy models that focus on the labor market and income effects of trade openness are only weakly able to account for people's perceptions of gain and loss. After developing the argument laid out above, the empirical analysis utilizes two cross-national surveys to demonstrate the strong empirical relationship between attitudes on social-cultural change and views on the impact of economic integration. The causal relationship between concerns about social-cultural change and economic integration is then tested using a large priming experiment. The essay thus offers a new argument by which to understand globalization's losers as a political constituency. The second essay builds on the argument advanced in the first, and examines how popular discontentment with economic openness translates into vote choice. The essay begins by studying the policy preferences of the losers, and then moves on to examine the variation in the types of parties for which they vote in different countries. The empirical analysis demonstrates that the losers hold preferences that are consistently more left-leaning on economic policy, but more conservative-leaning on social-cultural issues. Moreover, the analysis shows how the strategic incentives and constraints imposed by the electoral system shape the losers' vote choice along these two dimensions of preferences. The empirical investigation relies on an array of sources, including individual-level survey data on policy and voting preferences, data on party positions on the different issue dimensions, and measures of relative salience of the policy issues in parties' election campaigns. Taken together, the different analyses offer substantial evidence in support of the argument. The final essay is a micro-level analysis of how perceptions of loss from globalization come about. Utilizing a quasi-natural experiment in Israel's development towns, the study examines the effect of massive foreign investment by the multinational Intel Corp. on the political preferences of residents in Qiryat Gat, a small town in Israel's periphery. The analysis highlights the subjective nature of people's perceptions of loss, and shows how the differential effects of globalization can translate into actual shifts in vote choice. In addition to qualitative data collected in the field, the study employs a novel econometric methodology for counterfactual analysis to assess the electoral impact of the foreign investment.
Social sciences; Discontent; Economic integration; FDI; Foreign direct investment; Globalization; Globalization's losers; Synthetic control; Trade and culture; Political science; International law; Economic policy; 0615:Political science; 0616:International law
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