Incumbents beware: the impact of offshoring on elections

Stephanie Rickard

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: How does globalization affect politics? One of the most controversial aspects of globalization is offshoring, when manufacturing operations and business functions move abroad. Although voters generally dislike offshoring, it remains unclear how moving jobs abroad impacts democratic elections. Using a difference-in-differences estimation strategy, the author finds that incumbent government parties lose more votes in municipalities where a local plant moved production abroad between elections than in municipalities that did not experience such an event. The result holds across various time periods, different incumbent parties and diverse types of elections. In both national and regional elections, voters punish incumbent government parties when a local firm moves production abroad. Incumbent parties' vote shares fall as the number of jobs lost due to offshoring increases. In multiparty governments, voters disproportionately punish the largest coalition party for offshoring. The results of an original survey administered in Spain verify the importance of offshoring for voters' retrospective evaluations of incumbents.

Keywords: globalization; offshoring; voting; coalition government; incumbents; economic vote; regional government; elections (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2022-04-05
New Economics Papers: this item is included in nep-cdm, nep-eur, nep-lab and nep-pol
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Published in British Journal of Political Science, 5, April, 2022, 52(2), pp. 758 - 780. ISSN: 0007-1234

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:107517

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