[Peace-discuss] Globalisation and Economic Nationalism

[David Green]

Globalisation and Economic Nationalism
Posted on February 20, 2017  by  Yves Smith  By Italo Colantone, Assistant Professor of Economics, Bocconi University and Piero Stanig, Assistant Professor of Political Science, Bocconi University. Originally published at VoxEU
There has been a revival of nationalism in western democracies. The outcome of the Brexit referendum and the election of Donald Trump as president of the US are two major manifestations of this tendency. In Europe this trend began in the 1990s, and it has been associated with increasing support for radical right parties (Mudde 2007).In recent paper, we show that globalisation is a key determinant of this phenomenon (Colantone and Stanig 2017). We focus on the competitive shock created by the surge in imports from China between 1988 and 2007. This shock has had a heterogeneous impact across European regions that depends on the historical composition of employment in the region. Using data on legislative elections in 15 western European countries, we find that stronger regional exposure to the import shock determines an increase in support for nationalist parties, a general shift to the right in the electorate, and an increase in support for radical right parties. The policy proposals of these parties tend to bundle support for domestic free market policies with a strong protectionist stance, a combination that has come to be referred to as ‘economic nationalism’. As parties offering this policy mix become increasingly successful, we might see the end – and possibly even a reversal – of globalization.
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