Fischer, Justina A.V. (2012): Globalization and Political Trust.
Download (751kB) | Preview
This paper postulates that a country’s integration into the world economy may lower citizens’ political trust. I argue that economic globalization constrains government’s choice set of feasible policies, impeding responsiveness to the median voter. Matching individual-level survey data from 1981 to 2007, repeated cross-sections of altogether 260’000 persons from 80 countries, with a measure of a country’s degree of economic globalization for the same time period, I find that there is a trust-lowering impact of globalization; its magnitude, however, depends on whether or not the individual is informed about politics and the economy. Trust-lowering effects of globalization are larger for those who have no interest in politics, are unwilling to indicate their political leaning, or who have low educational levels. Two-stage least squares regressions and a set of country and time fixed effects support a causal interpretation. Obviously, viewing the domestic government as accountable for its policies plays a decisive role for the relation between economic globalization and political trust. Robustness against country’s degree of economic development, past globalization and different time periods is tested.
|Item Type:||MPRA Paper|
|Original Title:||Globalization and Political Trust|
|Keywords:||Political trust; globalization; international trade; openness; FDI; World Values Survey|
|Subjects:||F - International Economics > F1 - Trade > F15 - Economic Integration
D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, and Operations
H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods
Z - Other Special Topics > Z1 - Cultural Economics; Economic Sociology; Economic Anthropology > Z19 - Other
|Depositing User:||Justina AV Fischer|
|Date Deposited:||01. Feb 2012 16:12|
|Last Modified:||18. Feb 2013 08:41|
Alesina A., and E. La Ferrara (2002), Who trusts others?, Journal of Public Economics 85, 207–234.
Alessi, C. (2011), The Eurozone in Crisis, version: 2nd December 2011. Publisher: Council on Foreign Relations (download: http://www.cfr.org/eu/eurozone-crisis/p22055)
Anderson, C.J., and A.J. LoTempio (2002), Winning, Losing and Political Trust in America, British Journal of Political Science 32, 335-351
Argyris, C. (1960). Understanding organisational behaviour. Homewood, Illinois: Dorsey Press.
Bhagwati, J., and T.N. Srinivasan (2002), Trade and Poverty in the Poor Countries, The American Economic Review 92, Papers and Proceedings of the One Hundred Fourteenth Annual Meeting of the American Economic Association, 180-183
Baldwin, R.E., and P. Krugman (2004), Agglomeration, integration and tax harmonisation, European Economic Review 48, 1 – 23
Baum, C. F., M. E. Schaffer, and S. Stillman (2007), ivreg2: Stata module for extended instrumental variables/2SLS, GMM and AC/HAC, LIML, and k-class regression. Boston College Department of Economics, Statistical Software Components S425401. Downloadable from http://ideas.repec.org/c/boc/bocode/s425401.html.
Becker, G. S. (1957/1971), The Economic of Discrimination, 2nd edition 1971, Chicago: University of Chicago Press.
Becker, S.O., K. Boeckh, C. Hainz, and L. Woessmann (2011), The Empire is Dead, Long Live the Empire! Long-Run Persistence of Trust and Corruption in the Bureaucracy, CESifo Working Paper Series 3392.
Berg, J., J. Dickhaut, and K. McCabe, K., 1995. Trust, reciprocity, and social history, Games and Economic Behavior 10, 122–142.
Bernard, A., S. Redding, and P. Schott (2007), Comparative advantage and heterogeneous firms, Review of Economic Studies 74, 31–66.
Bernstein, J.I. (2000), Canadian Manufacturing, U.S. R&D Spillovers, and Communication Infrastructure, The Review of Economics and Statistics 82, 608-615.
Blanchflower, D.G., A.J. Oswald, and P. Sanfey (1996), Wages, Profits, and Rent Sharing, Quarterly Journal of Economics 111, 227–51.
Blank, R.M., and R.B Freeman, (1994), “Evaluating the Connection between Social Protection and Economic Flexibility”, in: R.M. Blank (ed.), Social Protection versus Economic Flexibility, Chicago: University of Chicago Press (1994): 21-41.
Bornhorst, F. A. Ichino, O. Kirchkamp, K.H. Schlag, and E. Winter (2010), Similarities and differences when building trust: the role of cultures, Experimental Econonomics 13, 260–283
Bourdieu, P. (1980), Le capital social: notes provisoires, Actes de la Recherche en Sciences Sociales 31, 2-3.
Bretschger, L., and F. Hettich (2002), Globalisation, capital mobility and tax competition: theory and evidence for OECD countries, European Journal of Political Economy 18, 695-716.
Burtless, G. (1995), International Trade and the Rise in Earnings Inequality, Journal of Economic Literature, 33, 800-816.
Cai, H., and D. Treisman (2005), Does Competition for Capital Discipline Governments? Decentralization, Globalization, and Public Policy, American Economic Review 95, 817-830.
Calvo, S., and C. Reinhart (1996), Capital flows to Latin America: Is there evidence of contagion effect?, G.A. Calvo, M. Goldstein, Eduard Hochreiter, Editors , Private capital flows to emerging markets after the Mexican crisis, Institute for International Economics, Washington, D.C. (1996).
Catterberg, G., and A. Moreno (2005), The individual bases of political trust: trends in new and established democracies, International Journal of Public Opinion Research 18, 31-48.
Chanley, V.A. (2002), Trust in Government in the Aftermath of 9/11: Determinants and Consequences, Political Psychology 23, 469-483.
Chanley, V.A., T.J. Rudolph, and W.M. Rahn (2000), The Origins and Consequences of Public Trust in Government: A Time Series Analysis, Public Opinion Quarterly 64, 229- 256
Citrin, J., and D. P. Green (1986), Presidential Leadership and the Resurgence of Trust in Government, British Journal of Political Science 16, 431-453.
Coe, D. T., and E. Helpman (1995), International R &D Spillovers, European Economic Review 39, 859-887.
Coleman, J. (1988), Social Capital in Creation of Human Capital, American Journal of Sociology 94, 95-121.
Converse, P.E. (1972) Change in the American Electorate, in: The Human Meaning of Social Change, ed. A. Campbell, and P. E. Converse. New York: Russell Sage Foundation, chapter 8, 263-337.
Davidson, C., L. Martin, and S. Matusz (1999), Trade and search generated unemployment, Journal of International Economics 48, 271–299.
Davidson, C., L. Martin, and S. Matusz (1988), The Structure of Simple General Equilibrium Models with Frictional Unemployment, Journal of Political Economy 96, 1267-1293
Davis, D.R. (1998), Does European Unemployment Prop up American Wages? National Labor Markets and Global Trade, The American Economic Review 88, 478-494.
Davis, E.P., and M.R. Stone (2004), Corporate financial structure and financial stability, Journal of Financial Stability 1, 65-91.
Davis, J., F.D. Schoorman, R.C. Mayer, and H. Tan (2000), The Trusted General Manager and Business Unit Performance: Empirical Evidence of a Competitive Advantage, Strategic Management Journal 21, 563-576.
Deaton, A., and J. Dreze (2002), Poverty and Inequality in India: A Re-Examination, Economic and Political Weekly 37, 3729-3748
Dollar, D. (2001), Globalization, Inequality and Poverty since 1980, Background paper, World Bank, Washington, DC, 2001 (available online: http://www.sfu.ca/~akaraiva/e455/dollar-glob.pdf).
Dollar, D. (2002), Global Economic Integration and Global Inequality, in: D. Gruen, T. O’Brien, and J. Lawson (Eds.), Globalisation, Living Standards and Inequality: Recent Progress and Continuing Challenges, Australia: J.S. McMillan Printing Group, 9-36.
Dollar, D., and Kraay, A. (2004), Trade, Growth, and Poverty, The Economic Journal 114, F22–F49.
Dornbusch, R., Y.C. Park, and S. Claessens (2000), Contagion: Understanding how it spreads, World Bank Research Observer 15, 177–197.
Dreher, A., and N. Gaston, (2007), Has Globalisation Really had no Effect on Unions?, Kyklos 60, 165-186,
Dreher, A., and N. Gaston, (2008), Has Globalization Increased Inequality?, Review of International Economics 16, 516-536.
Dreher, A., N. Gaston, and P. Martens (2008), Measuring Globalization – Gauging its Consequences, New York: Springer.
Dreher, A., J.-E.Sturm, and H.W. Ursprung (2008), The impact of globalization on the composition of government expenditures: Evidence from panel data, Public Choice 134, 263-292.
Edison, H.J., P. Luangaram, and M. Miller (1998), Asset Bubbles, Domino Effects and ‘Lifeboats’: Elements of the East Asian crisis, CSGR Working Paper No. 05/98
Egger, H., and U. Kreickemeier (2009), Firm Heterogeneity and the Labor Market Effects of Trade Liberalization, International Economic Review 50, 187–216.
Evans, P. (1996), Government Action, Social Capital and Development: Reviewing the Evidence on Synergy, World Development 24, 1119-1132.
Feenstra, R., and G. Hanson (1997), Foreign Direct Investment and Relative Wages: Evidence from Mexico’s Maquiladoras, Journal of International Economics 42, 371-393.
Felbermayr, G., J. Prat, and H.-J. Schmerer (2011), Globalization and labor market outcomes: wage bargaining, search frictions, and firm heterogeneity, Journal of Economic Theory 146, 39–73.
Fischer, J.A.V. (2011), Living under the ‘right’ government: does political ideology matter to trust in political institutions?, CEIS Research Paper 212, Tor Vergata University, CEIS.
Fischer, J.A.V. (2008), Is competition good for trust? Cross-country evidence using micro-data, Economics Letters 100, 56-59.
Fischer, J.A.V., and F. Somogyi (2011), Globalization and Protection of Employment, University of Bern, mimeo.
Frankel, J.A., and D. Romer (1999), Does Trade Cause Growth? The American Economic Review 89, 379-399.
Fukuyama, F. (1995), Trust: The social virtues and the creation of prosperity. London: Penguin Books.
Forbes, K.J. (2004), The Asian flu and Russian virus: the international transmission of crises in firm-level data, Journal of International Economics 63, 59-92.
Gamson, W.A. (1968), Power and Discontent. Homewood, IL: Dorsey Press.
Garett, G. (1995), Capital mobility, trade, and the domestic politics of economic policy, International Organization 49, 657-687.
Garett, G. (1998), Partisan Politics in the Global Economy, Cambridge: Cambridge University Press (1998).
Gaston, N., and D. Nelson (2002), Integration, Foreign Direct Investment and Labor Markets: Microeconomic Perspectives, The Manchester School 70, 420-59.
Gershtenson, J., J. Ladewig, and D.L. Plane (2006), Parties, Institutional Control, and Trust in Government, Social Science Quarterly 87, 882-901.
Guiso, L. (2010), A trust-driven financial crisis. Implications for the future of financial markets, Economics Working Papers ECO2010/07, European University Institute.
Haddad, M., and A. Harrison (1993), Are there positive spillovers from direct foreign investment? Evidence from panel data for Morocco, Journal of Development Economics 42, 51-74.
Haile, F., and S. Pozo (2008), Currency crisis contagion and the identification of transmission channels, International Review of Economics & Finance 17, 572-588.
Hardin, R. (2003), Trust and Trustworthiness, Russell Sage Foundation, New York (2003).
Helpman, E., and O. Itskhoki, (2010), Labour Market Rigidities, Trade and Unemployment, Review of Economic Studies 77, 1100-1137.
Henrich, R,. R. Boyd, C. Bowles, C. Camerer, E. Fehr, H. Gintis, and R. McElreath, (2001), In search of homo economicus: behavioral experiments in 15 small-scale societies, American Economic Review Papers and Proceedings 91, 73–78.
Hernández, L.F., and O.R. Valdés (2001), What drives contagion: Trade, Neighborhood, or financial links?, International Review of Financial Analysis 10, 203-218.
Hertz, S. (1999), Domino Effects in International Networks, Journal of Business-to-Business Marketing 5, 3-31.
Hetherington, M. J. (1998), The Political Relevance of Trust, American Political Science Review 92, 791-808.
Hicks, A.M., and D.H. Swank (1992), Politics, Institutions, and Welfare Spending in Industrialized Democracies, 1960-82, The American Political Science Review 86, 658-674.
Hines, J.R., and L.H. Summers (2009), How Globalization Affects Tax Design, Tax Policy and the Economy 23, 123-158
Huber, E., and J. Stephens (1998), Internationalization and the Social Democratic Model, Comparative Political Studies 31, 353-97.
Holweg, M., P. Davies, and P. Podpolny (2009), The Competitive Status of the UK Automotive Industry, Buckingham: PICSIE Books, 2009. Download: http://www-innovation.jbs.cam.ac.uk/publications/downloads/holweg_competitive.pdf (26th December 2011)
ILO (1996), Globalization of the footwear, textiles and clothing industries. Report for discussion at the Tripartite Meeting on the Globalization of the Footwear, Textiles and Clothing Industries: Effects on Employment and Working Conditions. ISBN 92-2-110182-7. International Labour Office, Geneva, 1996.
Jick, T. (1993). Managing change: cases and concepts. Homewood, IL: Irwin.
Khan, S., and K.W. Park (2009), Contagion in the stock markets: The Asian financial crisis revisited, Journal of Asian Economics 20, 561-569.
Knack, S., and P. Keefer (1997), Does Social Capital Have an Economic Payoff? A Cross-Country Investigation, The Quarterly Journal of Economics 112, 1251-88.
Keele, L. (2007), Social Capital and the Dynamics of Trust in Government, American Journal of Political Science 51, 241-254.
Krugman, P. (1995). Growing World Trade: Causes and Consequences, Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution 26(1, 25th A), 327-377.
Krueger, A. (1983), Trade and employment in developing countries, 3. Synthesis and conclusions. Chicago: University of Chicago Press, 1983.
Labonne, J., and R.S. Chase (2010), A road to trust, Journal of Economic Behavior and Organization, Volume 74, Issue 3, 253-261
Lazear, E.P. (2011), The Euro Crisis: Doubting the 'Domino' Effect, The Wall Street Journal, 31 October 2011
Lindert P.H., and J.G. Williamson (2001), Does Globalization Make the World More Unequal?, in: M.D. Bordo, A.M. Taylor, and J.G. Williamson, Globalization in Historical Perspective, Chicago: University of Chicago Press, 227-275, 2003.
Lipset, S. M., and W. Schneider (1983), The Decline of Confidence in American Institutions, Political Science Quarterly 98, 379-402.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. Vishny (1999), The Quality of Government, Journal of Law, Economics and Organization 15, 222-79.
Leigh, A. (2006), Trust, inequality, and ethnic heterogeneity, The Economic Record 82, 268-280
Levi, M., and L. Stoker (2000), Political Trust and Trustworthiness, Annual Review of Political Science 3, 475-507.
Lipset, S. M., and W. Schneider (1983), The Decline of Confidence in American Institutions, Political Science Quarterly 98, 379-402.
Mehlum, H., K . Moene, and R. Torvik, (2006). Cursed by resources or institutions? World Economy 29, 1117-1131.
Markwat, T., E. Kole, and D. van Dijk (2009), Contagion as a domino effect in global stock markets, Journal of Banking and Finance 33, 1996-2012.
Miller, A.H. (1974a), Political Issues and Trust in Government: 1964-1970, American Political Science Review 68, 951-972.
Miller, A.H. (1974b), Rejoinder to 'Comment' by Jack Citrin, Political discontent or ritualism? American Political Science Review 68, 989-1001.
Mishkin, F. (1992), Anatomy of a Financial Crisis, Journal of Evolutionary Economics 2, 115-30.
Mishler, W., and R. Rose (2001), What are the Origins of Political Trust? Testing Institutional and Cultural Theories in Post-Communist Societies, Comparative Political Studies 34, 30-62.
Mohnen, P. (2001), International R&D Spillovers and Economic Growth, in Matti Pohjola (ed.), Information Technology, Productivity, and Economic Growth: International Evidence and Implications for Economic Development, Oxford University Press 2001, 50-71.
Newton, K. (2001), Trust, Social Capital, Civil Society, and Democracy, International Political Science Review 22, 201–214.
Newton, K., and P. Norris (2000), Confidence in Public Institutions: Faith, Culture or Performance? In: S. Pharr and R. Putnam (Eds). DISAFFECTED DEMOCRACIES: What's Troubling the Trilateral Countries? Princeton, NJ: Princeton, University Press, 2000, Chapter 3, 54-73.
Özyilmaz, A. (2010), Vertical Trust in Organizations: A Review of Empirical Studies Over The Last Decade, Mustafa Kemal University Journal of Social Sciences Institute 7, 1 – 28.
Orren, G. (1997), Fall From Grace: The Public's Loss of Faith in Government. In: P. Zelikow, J. Nye, Jr., and D.C. King (Eds.), Why People Don't Trust Government. Cambridge, MA: Harvard University Press.
Ostrom, E. (2000), Collective Action and the Evolution of Social Norms, Journal of Economic Perspectives 14, 137-158
Plümper, T., Tröger, V., and Manow, P. (2005), Panel data analysis in comparative politics: Linking method to theory, European Journal of Political Research 44, 327–354.
Poole, P. P., D.A. Gioia, and B. Gray (1989). Influence modes, schema change, and organizational transformation. Journal of Applied Behavioral Science 25, 271–289.
Proudman, J., and S. Redding (2000), Evolving Patterns of International Trade, Review of International Economics 8, 373-396.
Putnam, R.D. (2000), Bowling alone. The collapse and revival of American community. New York: Simon & Schuster.
Qian, Y., and G. Roland (1998), American Economic Association, Federalism and the Soft Budget Constraint, American Economic Review 88, 1143-1162.
Krugman, P. (1998). What happened to Asia. Global competition and integration, Mimeo, MIT. (download: http://www.econ.tuwien.ac.at/hanappi/FinMkt/pdf/Asia_Krugman.pdf )
Robinson, S.L. (1996), Trust and Breach of the Psychological Contract, Administrative Science Quarterly 41, 574-599.
Robinson, S., and D. Rousseau (1994), Violating the psychological contract: Not the exception but the norm, Journal of Organizational Behaviour 16, 289-298.
Robinson, S. L., and E.W. Morrison (1995), Psychological contracts and OCB: The effect of unfulfilled obligations on civic virtue behaviour, Journal of Organizational Behavior 16, 289–298.
Rodrik, D. (1998), Why do more Open Economies Haver Bigger Governments?, Journal of Political Economy 106, 997-1032.
Rousseau, D. (1989), Psychological and implied contracts in organizations, Employee Responsibilities and Rights Journal 2, 121-139.
Rousseau, D. (2001), Schema, promise and mutuality: The building blocks of the psychological contract, Journal of Occupational and Organizational Psychology 74, 511–541.
Rousseau, D. M., and S.A.Tijoriwala (1999), What makes a good reason to change? Motivated reasoning and social accounts in organizational change, Journal of Applied Psychology 84, 514–528.
Rumelhart, D. E., and D.A. Norman (1978). Accretion, tuning, and restructuring: three modes of learning. In R. Klatsky & J. W. Cotton (Eds.), Semantic factors in cognition, Hillsdale, NJ: Lawrence Erlbaum, 37–53
Schein, E. H. (1965, Reprinted 1980). Organizational psychology. New Jersey: Englewood Cliffs
Schulze, G., and H.W. Ursprung (1999), Globalization of the economy and the nation state, The World Economy 22, 295-352.
Smeeding, Th. (2002), Globalisation, Inequality and the Rich Countries of the G-20: Evidence from the Luxembourg Income Study (LIS), in: D. Gruen, T. O’Brien and J. Lawson (Eds.), Globalisation, Living Standards and Inequality: Recent Progress and Continuing Challenges, Australia: J.S. McMillan Printing Group, 179-206.
Srinivasan, T.N., and J. Bhagwati, (2001), Out-ward Orientation and Development: Are Re-visionists Right? In: D. Lal and R. Shape, eds., Trade, development and political economy: Essays in honour of Anne Krueger. London: Palgrave, 2001; expanded version available online at (http://www.columbia. edu/-jC28).
Stolle, D. (2000), Social Capital: A New Research Agenda? Toward an Attitudinal Approach. In: ECPR Workshop13: Voluntary Associations, Social Captial and Interest Mediation: Forging the Link. Copenhagen.
Thijs, T.R., and P. Mohnen, (2008), Competition and performance: The different roles of capital and labor, Journal of Economic Behavior and Organization 65, 573-584.
Van Pottelsberghe De La Potterie, B., and F. Lichtenberg (2001), Does Foreign Direct Investment Transfer Technology Across Borders?, The Review of Economics and Statistics 83, 490-497.
Van Rijckeghem, C., and B. Weder (2001), Sources of contagion: is it finance or trade?, Journal of International Economics 54, 293-308.
Vollrath, T.L. (1991), A Theoretical Evaluation of Alternative Trade Intensity Measures of Revealed Comparative Advantage, Weltwirtschaftliches Archiv 127, 265-280.
Wood, A. (1994), North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-driven World, New York: Oxford University Press, 1994.
WDI (2011), Word Development Indicator database,World Bank.
Weatherford, M.S. (1984), Economic 'Stagflation' and Public Support for the Political System, British Journal of Political Science 14, 187-205
Zak, P.J., and S. Knack (2001). Trust and Growth, Economic Journal 111, 295-321.