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Trade Policy Reform

'Making the case for trade': Winning voters’ trust by strengthening social safety nets

Christopher Colford's picture

Policy persuasion is most effective when it draws on the evidence base of all the social-science disciplines. Every strand of the social sciences – not just the mathematical precision of economics, but also the nuanced interpretations of history and the subtle trajectories of sociology – has a great deal to contribute as policymakers balance competing priorities.

That multidisciplinary approach – emphasized in such recent works as The History Manifesto, in which Harvard and Brown University historians call for policymakers’ greater reliance on the combined reasoning of all the social sciences – was thoroughly borne out in the recent Development Economics Series lecture by economist David Autor of MIT (who is a scholar at the National Bureau of Economic Research). Presenting a research paper on trade policy, and underscoring the importance of public opinion in shaping policymakers’ approach to it, Autor’s presentation used the logic of political science to highlight the electoral mood swings that help shape countries’ position on international trade.

Using the perspectives of political science – in the paper, “Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure” (co-authored with colleagues from the University of Zurich; the University of California, San Diego; and Lund University) – was a valuable way to help remind Autor's economics-focused World Bank Group audience that policymaking does not occur in an academic vacuum. Even though the Bank’s economics-heavy analyses may try to distill policy options into quantifiable formulae, the policymakers whom the Bank advises get their political mandate from their countries’ volatile voters – who do not always follow homo economicus’ coldly rational approach to decision-making.

Amid the topsy-turvy 2016 electoral cycle in many countries – in which voters’ fears about job losses due to international trade have been inflamed amid an upsurge of populism and protectionism – you don’t have to be a public-opinion pollster to affirm Autor's assertion in his analysis of recent U.S. voting patterns: “We detect an ideological realignment that is centered in trade-exposed local labor markets and that commences prior to the divisive 2016 U.S. presidential election. Exploiting the exogenous component of rising trade with China and classifying legislator ideologies by their congressional voting record, we find strong evidence that congressional districts exposed to larger increases in import competition disproportionately removed moderate representatives from office in the 2000s.”

Translation: If you’re a pro-trade lawmaker in a district that has a high degree of imports from overseas, in a region that has endured what Autor calls “economic scarring,” then you’re likely to pay a heavy price at the ballot box – and, if you’re defeated, your successor just might be a strident protectionist. The Autor analysis shrewdly underscores the adjective “political” in the anodyne textbook phrase, “political economy.”

March Madness or Spring Awakening?

John Wilson's picture

APEC and New Beginnings in Trade

The first Senior Officials’ Meeting (SOM I) of Asia-Pacific Economics Cooperation (APEC) concluded earlier this month in Washington D.C. The APEC 2011 agenda now swings into full action. The member economies in the region are looking for ways to reaffirm APEC’s reputation for innovative economic integration initiatives – and the means by which to stave off new hiccups in the region’s economic recovery.  In particular, the new APEC Supply Chain Connectivity Initiative (SCI) holds real promise as a dynamic successor to APEC’s successful Trade Facilitation Action Plans, which resulted in significant trade cost reductions across the region. 

As a testament to the dynamism and ambition behind the trade-related policy goals of APEC – the United States, as APEC 2011 Chair, and the World Bank are working with APEC to build a platform to expand trade through research, data, and capacity building – with direct participation of private sector firms. Fedex is with us in this new venture. Is this March madness – yet another attempt to forge alliances where goals are shared but sustaining momentum proves tough?  Or is it a spring awakening that data, research, and direct partnerships with firms to build in this area provides the real anchor for taking action to assist developing countries tackle trade costs at their source?  I suggest it is the latter.