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Globalization, Government Popularity, and the Great Skill Divide

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  • Aksoy, Cevat Giray

    () (European Bank for Reconstruction and Development)

  • Guriev, Sergei

    () (Sciences Po, Paris)

  • Treisman, Daniel

    () (University of California, Los Angeles)

Abstract

How does international trade affect the popularity of governments and leaders? The recent backlash against globalization renders this question extremely topical. Yet, most previous work has looked for political effects of aggregate trade flows without decomposing into particular types of products. We provide the first large-scale, global evidence that trade shocks affect political approval and show that what matters is the match between workers' skills and the characteristics of goods traded. Using a unique data set including 118 countries, we show that growth in high skill intensive exports increases approval of incumbents among skilled individuals. Growth in high skill intensive imports has the opposite effect. High skill intensive trade has no discernible effect on the unskilled. To identify exogenous variation, we exploit the time-varying effects of air and sea distances on bilateral trade flows. Our findings help explain responses to trade of economic elites in developing and middle income countries.

Suggested Citation

  • Aksoy, Cevat Giray & Guriev, Sergei & Treisman, Daniel, 2020. "Globalization, Government Popularity, and the Great Skill Divide," IZA Discussion Papers 13026, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp13026
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    References listed on IDEAS

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    Cited by:

    1. Aksoy, Cevat & Eichengreen, Barry & Saka, Orkun, 2020. "The Political Scar of Epidemics," CEPR Discussion Papers 14879, C.E.P.R. Discussion Papers.
    2. Fetzer, Thiemo, 2018. "Did Austerity Cause Brexit?," CAGE Online Working Paper Series 381, Competitive Advantage in the Global Economy (CAGE).

    More about this item

    Keywords

    international trade; political approval; skill intensity of trade;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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