Government Spending and Public Support for Trade in the OECD: An Empirical Test of the Embedded Liberalism Thesis

Hays, Jude C.; Ehrlich, Sean D.; Peinhardt, Clint

doi:10.1017/s0020818305050150

Cited by 217 publications

(152 citation statements)

References 16 publications

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“…Edward Mansfield and Diana Mutz argue that "trade attitudes are guided less by material self-interest than by perceptions of how the US economy as a whole is members of comparative-advantage industries while hurting members of comparative-disadvantage industries. See Beaulieu 2002;Hays, Ehrlich, and Peinhardt 2005;Mayda and Rodrik 2005. 12. Mansfield and Mutz 2009;Wolfe and Mendelsohn 2005.…”

Section: Self Interest and The Potential Role Of Economic Ignorancementioning

confidence: 99%

Why Don't Trade Preferences Reflect Economic Self-Interest?

Rho¹,

Tomz²

2017

Int Org

251

195

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The dominant approach to the study of international political economy assumes that the policy preferences of individuals and groups reflect economic self-interest. Recent research has called this assumption into question by suggesting that voters do not have economically self-interested preferences about trade policy. We investigate one potential explanation for this puzzling finding: economic ignorance. We show that most voters do not understand the economic consequences of protectionism. We then use experiments to study how voters would respond if they had more information about how trade barriers affect the distribution of income. We find that distributional cues generate two opposing effects: they make people more likely to express self-serving policy preferences, but they also make people more sensitive to the interests of others. In our study both reactions were evident, but selfish responses outweighed altruistic ones. Thus, if people knew more about the distributional effects of trade, the correlation between personal interests and policy preferences would tighten. By showing how the explanatory power of economic self-interest depends on beliefs about causality, this research provides a foundation for more realistic, behaviorally informed theories of international political economy.Over the past two decades, open-economy politics (OEP) has emerged as the dominant paradigm in the field of international political economy. Scholars working in this tradition reason "from the most micro-to the most macro-level." 1 They use economic theory to derive the policy preferences of individuals and groups within a country, and then investigate how political institutions and international bargaining translate preferences into actual policies. Initially developed to explain trade policy, OEP has been extended to many other issues, including international monetary policy, capital controls, foreign investment, foreign aid, and immigration. 2 Today OEP is recognized as the principal approach to international political economy in the United States, and it has transformed scholarship in other parts of the world as well. 3 We are grateful for helpful comments from many colleagues, including

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Section: Self Interest and The Potential Role Of Economic Ignorancementioning

confidence: 99%

Why Don't Trade Preferences Reflect Economic Self-Interest?

Rho¹,

Tomz²

2017

Int Org

251

195

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“…In addition, previous individual-level studies have generally relied on singleitem indicators+ Individual questions tend to be unreliable and sensitive to question wording and to the framing of options, problems that are easily avoided if responses across a variety of measures produce a reliable index+ 31 We also use these data to expand the potential ways in which self-interest might enter into these policy preferences, beyond skill levels and industry impact+ Interestingly, most research on this topic has not viewed trade as a political issue+ Instead, the emphasis in explaining trade attitudes has been on how trade 30+ These studies include Bauer, Pool, and Dexter 1963;Balistreri 1997;Scheve and Slaughter 2001;Baker 2003 andBurgoon and Hiscox 2004;Kaltenthaler, Gelleny, and Ceccoli 2004;Mayda and Rodrik 2005;Hays, Ehrlich, and Peinhardt 2005;Hainmueller and Hiscox 2006;andKocher andMinushkin 2006+ 31+ See Bauer, Pool, andDexter 1963, 84-85;Worldviews 2002; positively or negatively affects individuals economically+ With these data, we examine not only the dominant political economy models, but also the sociotropic hypothesis, which is the preference formation model most widely documented in public opinion research on economic policy preferences+ In so doing, we not only improve our overall understanding of the origins of attitudes toward trade, we also reveal the importance of the kind of political information that reaches citizens in explaining American preferences in this policy domain+…”

Section: The Origins Of Trade Preferencesmentioning

confidence: 99%

“…and in 2006~for the 2007 survey! for each occupation in our sample+ 39 We also asked 38+ See Attewell 1990, 425;Spenner 1990, 407;Balistreri 1997;Scheve and Slaughter 2001;Hays, Ehrlich, and Peinhardt 2005;and Mayda and Rodrik 2005+ 39+ The data on occupation and wages are taken from U+S+ Department of Labor 2008a and 2008b, respectively+ each respondent about his or her formal education and created three dummy variables based on this information+ The first, some college, indicates whether the person graduated from a technical school or a two-year college, or whether the respondent attended but did not graduate from a four-college+ The second, college graduate, indicates whether he or she graduated from a four-year college; and the third, graduate school, indicates whether the person attended graduate school+ The reference category is someone who did not receive any formal education beyond high school+…”

Section: The Independent Variablesmentioning

confidence: 99%

Support for Free Trade: Self-Interest, Sociotropic Politics, and Out-Group Anxiety

Mansfield

Mutz²

2009

Int Org

578

237

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Although it is widely acknowledged that an understanding of mass attitudes about trade is crucial to the political economy of foreign commerce, only a handful of studies have addressed this topic. These studies have focused largely on testing two models, both of which emphasize that trade preferences are shaped by how trade affects an individual's income. The factor endowments or Heckscher-Ohlin model posits that these preferences are affected primarily by a person's skills. The specific factors or Ricardo-Viner model posits that trade preferences depend on the industry in which a person works. We find little support for either of these models using two representative national surveys of Americans. The only potential exception involves the effects of education. Initial tests indicate that educational attainment and support for open trade are directly related, which is often interpreted as support for the Heckscher-Ohlin model. However, further analysis reveals that education's effects are less representative of skill than of individuals' anxieties about involvement with out-groups in their own country and beyond. Furthermore, we find strong evidence that trade attitudes are guided less by material self-interest than by perceptions of how the U.S. economy as a whole is affected by trade. Disciplines AbstractAlthough it is widely acknowledged that an understanding of mass attitudes about trade is crucial to the political economy of foreign commerce, only a handful of studies have addressed this topic+ These studies have focused largely on testing two models, both of which emphasize that trade preferences are shaped by how trade affects an individual's income+ The factor endowments or HeckscherOhlin model posits that these preferences are affected primarily by a person's skills+ The specific factors or Ricardo-Viner model posits that trade preferences depend on the industry in which a person works+ We find little support for either of these models using two representative national surveys of Americans+ The only potential exception involves the effects of education+ Initial tests indicate that educational attainment and support for open trade are directly related, which is often interpreted as support for the Heckscher-Ohlin model+ However, further analysis reveals that education's effects are less representative of skill than of individuals' anxieties about involvement with out-groups in their own country and beyond+ Furthermore, we find strong evidence that trade attitudes are guided less by material self-interest than by perceptions of how the U+S+ economy as a whole is affected by trade+The politics of international trade has been a long-standing puzzle for social scientists+ Among economists, there is widespread agreement that free trade is beneficial+ 1 Open trade and cross-national market integration help to allocate factors of production efficiently and to promote the welfare of countries and the world as

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“…For example, countries that chose to grant independence to their central banks could expect lower borrowing costs on international capital markets (e.g., Maxfield 1997); those that fixed their exchange rates could potentially benefit from increased international trade (e.g., Klein and Shambaugh 2006); and governments that altered their provision of welfare-state programs could expect a corresponding change in public perceptions of globalization and political support for economic openness (Baker 2005;Hays, Ehrlich, and Peinhardt 2005;Scheve and Slaughter 2004).…”

Section: Domestic Financial Regulationmentioning

confidence: 99%