A Popular Backlash Against Globalization?

Piero Stanig, Italo Colantone and Gianmarco Ottaviano

No 24226, BAFFI CAREFIN Working Papers from BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy

Abstract: Is there a popular backlash against globalization? When did it start and in which forms? What do we know about its causes? We address these questions in the context of advanced democracies. We see the “globalization backlash” as the political shift of voters and parties in a protectionist and isolationist direction, with substantive implications on governments’ leaning and enacted policies. We discuss the empirical evidence on the backlash. We develop a theoretical discussion within the framework of the crisis of embedded liberalism. We nest within this framework theoretical results from international economics showing how the backlash may arise within standard trade models when considering the “social footprint” of globalization. These theoretical insights are consistent with available empirical evidence pointing to the role of globalization as a driver of the backlash. Yet, globalization is only one of the drivers of the backlash. There are other economic factors playing a similar role, such as technological change, fiscal austerity, and immigration. Moreover, cultural concerns such as status-threat, authoritarianism, and nativism do play a relevant role, with a significant interplay with economic drivers. This calls for a broad and comprehensive approach to the backlash, both from an academic and from a policy making perspective. Classification-JEL Keywords

Pages: 43
Date: 2024
New Economics Papers: this item is included in nep-int and nep-pol
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