The Political Economy of Globalization: How Firms, Workers, and Policymakers are Responding to Global Economic Integration

Year Awarded: 2005

This Initiative has concluded its research.

How strong is the political backlash against globalization? To what extent are firms in different industries responding to new international economic pressures by lobbying their governments for more protection and support, and how are they altering their investment, hiring, and training practices? Has globalization changed the way workers regard job training or their willingness to change jobs and occupations? Has globalization affected men and women differently? How are trade associations and labor unions responding to the new and diverse needs of their memberships? Are policymakers prepared to support new protectionist measures to curb the effects of globalization? Does continued globalization require an increased role for the government in providing social insurance and adjustment assistance? Are the protection of human rights and labor and environmental standards becoming more critical in political debates about trade openness? These are critical questions at a time when multilateral trade negotiations have stalled, controversy about the “outsourcing” of jobs to foreign countries has come to dominate media coverage of the trade issue and policy debates in the United States, and new restrictions on immigration have been adopted by a growing number of western governments.

This project aimed to address these questions very directly by gathering detailed data on the policy preferences and political and economic activities of a large sample of firms, workers, organizations, and policymakers in a range of developed and developing nations. The project will administer in-depth surveys to firm managers, workers, and representatives of industry trade associations and labor unions in 16 nations, coupling these with surveys of legislators in each country. The countries targeted for inclusion in the study include 10 developed economies (Australia, Canada, Denmark, Germany, France, Japan, Sweden, Spain, the United Kingdom, the United States) and 6 developing economies (Argentina, Brazil, Chile, China, India, Mexico, and South Africa). The project will be organized and administered by a team of political scientists and economists with expertise in the political economy of trade, investment, immigration, labor market regulation, and social welfare policy, and with research experience in both developed and developing economies.

The project made major contributions to ongoing research in several fields of political economy. In particular, it provided new measures of firm and individual-level preferences over a range of economic policies, along with new indicators of the industry and firm specificity of physical and human capital, a new set of data on the political activities of firms and workers, a detailed investigation of principal-agent relations between firms and trade associations and between workers and labor unions, and data on the types and sources of information that firms, individuals, and policymakers rely upon when formulating policy preferences and making critical decisions. The team gathered new data crucial to researchers examining the effects of trade protection and industry assistance, different types of labor market regulations, immigration and investment restrictions, and job retraining and adjustment assistance programs. This broad range of cross-nationally comparable, micro-level economic and political data had never before been assembled.

Principal Investigators

Margarita Estévez-Abe

Former Weatherhead Center Faculty Associate.

Michael Hiscox

Faculty Associate. Clarence Dillon Professor of Government, Department of Government, Harvard University.

Robert Z. Lawrence

Faculty Associate. Albert L. Williams Professor of International Trade and Investment, Harvard Kennedy School.

See also: Initiatives