I recently came across a fascinating paper by Dani Rodrik, an economist always worth reading. The paper, titled "Why Does Globalization Fuel Populism? Economics, Culture, and the Rise of Right-wing Populism" (NBER Working Paper No. 27526, July 2020) argues that "there is compelling evidence that globalization shocks, often working through culture and identity, have played an important role in driving up support for populist movements, particularly of the right-wing kind."
Rodrik carries out "an empirical analysis of the 2016 presidential election in the U.S. to show globalization-related attitudinal variables were important correlates of the switch to Trump."
- "Trump voters were more likely to be white, older, and college-educated.
- "...they were significantly more hostile to racial equality and perceived themselves to be of higher social class.
- "The estimated coefficient on racial attitudes is particularly large: a one-point increase in the index of racial hostility – which theoretically ranges from 1 to 5 – is associated with a 0.28 percentage point increase in the probability of voting for Trump (Table below, column 1).
- "By contrast, economic insecurity does not seem to be associated with a propensity to vote for Trump.
"The finding that Trump voters thought of themselves as belonging to upper social classes ... largely reflects the role played by party identification in shaping voting preferences. When we control for Republican party identification (cols. 2 and 6), the estimated coefficient for social class drops sharply and ceases to be statistically significant."
"Note, however, that racial hostility remains significant, although its estimated coefficient becomes smaller (cols. 2 and 6)."
The other columns in the table above examine attitudes towards globalization (columns 2-5).
- "All three of our measures enter statistically significantly:
- "Trump voters disliked trade agreements and immigration;
- "They were also against bank regulation (presumably in line with the general anti-regulation views of (cols. 2-5) the Republican party).
- "These indictors remain significant in the kitchen-sink version where they are all entered together (col. 6)."
"In none of these regressions does economic insecurity (financial worries) enter significantly. This
changes when we move from Trump voters in general to switchers from Obama to Trump (cols. 7-12). ... financial worries now becomes statistically significant, and switchers do not identify with the upper social classes. "
"Switchers are similar to Trump voters insofar as they too dislike trade agreements and immigration
(cols. 9-11). But they are dissimilar in that they view regulation of banks favorably. Hence switchers
appear to be against all aspects of globalization – trade, immigration, finance. the regression."
Rodrik postulates "a conceptual framework to clarify the various channels through which globalization can stimulate populism" on both "the demand and supply sides of politics". He also lists "the different causal pathways that link globalization shocks to political outcomes".
Rodrik identifies "four mechanisms in particular, two each on the demand and supply sides:
- (a) a direct effect from economic dislocation to demands for anti-elite, redistributive policies;
- (b) an indirect demand-side effect, through the amplification of cultural and identity divisions;
- (c) a supply-side effect through political candidates adopting more populist platforms in response to economic shocks; and
- (d) another supply-side effect through political candidates adopting platforms that deliberately inflame cultural and identity tensions in order to shift voters’ attention away from economic issues."
The full paper, accessible at https://www.nber.org/papers/w27526.pdf is choke full of other insights and is absolutely worth reading.