A protectionist bias?
How can evidence-based information on the gains and losses from trade can influence individuals’ preferences toward trade policy? This is the question that Alfaro et al. attempt to answer in this paper. They develop a series of survey-based experiments, conducted in the U.S. annually from 2018-2022, that contain randomized information treatments, each providing a short summary of evidence from economics research on the gains and losses from trade. They find that:
- Information that trade has had adverse impacts on manufacturing jobs (“Trade Hurts Jobs”) raises support among survey respondents for more protection against imports.
- Surprisingly, narratives that point to job gains in non-manufacturing sectors (“Trade Helps Jobs”) or to gains through lower consumer prices (“Trade Helps Prices”, “Tariff Hurts Prices”) also induce a preference for protection.
- Expressed preferences are driven in part by how the received information interacts with one’s political identity, resulting in prior-biased belief updating, as well as by pre-existing concerns over the impact on American jobs and over trade with China.
Can Evidence-Based Information Shift Preferences Towards Trade Policy?
Authors: Laura Alfaro, Maggie X. Chen, Davin Chor
From: Harvard Business School, George Washington University, Dartmouth
Trade and populism: a granular view
In this paper, Docquier et al. empirically assess how globalization shocks have determined populism trends over the last six decades. They create new measures of populism for the period 1960-2018 using the Manifesto Project Database (MPD) and study how trade, migration, and the skill-content contribute to the formation of populism:
[We] show empirically that populism strongly reacts to the skill structure of globalization shocks. Imports of low-skill labor-intensive goods increase both total and right-wing populism. Low-skill immigration, on the other hand, induces a transfer of votes from left-wing to right-wing populist parties. Finally, imports of high-skill labor-intensive goods, as well as high-skill immigration, tend to reduce the volume of populism.
Populism and the Skill Content of Globalization
Authors: Frédéric Docquier, Lucas Guichard, Stefano Iandolo, Hillel Rapoport, Riccardo Turati, Gonzague Vannoorenberghe
From: Luxembourg Institute of Socio-Economic Research, Universit`a degli Studi di Salerno, Paris School of Economics, Universitat Autónoma de Barcelona, Université Catholique de Louvain.
