Finding exogenous variables to establish control mechanisms is difficult outside of randomised control trials. This column shows that under certain circumstances, it is possible to separate out the causal effect of an unknown variable on the observed and unobserved variables. When applied to trade exposure and voter sentiment for populist parties, the model is largely accurate and gives the surprising finding that 170% of the total effect of trade exposure on populist voting is explained by labour markets, meaning that trade exposure’s other effects on voting – those that do not run through labour markets – are politically moderating.
Christian Dippel, Robert Gold, Stephan Heblich, Rodrigo Pinto, 12 April 2017
Thorsten Beck, Geoffrey Underhill, 01 March 2017
The institutions and even the very idea of the EU are under fire, with feelings of disenfranchisement among large parts of the population driving support for populist movements across the continent. This column introduces a new eBook that brings together analyses of this multidimensional crisis and of the way out - the future of the European Union. A worryingly common message is that muddling through will not be enough to save the EU as a political project.
Marco Buti, Karl Pichelmann, 22 February 2017
With its current competences lacking the ability to address distribution effects, the EU is seen as an agent of globalisation rather than a response to it. At the same time, it is charged with undermining national autonomy, identity, and control. This column sets out five guiding principles for policy articulation at the EU level for a new positive EU narrative.
Italo Colantone, Piero Stanig, 20 February 2017
The revival of nationalism in western Europe, which began in the 1990s, has been associated with increasing support for radical right parties. This column uses trade and election data to show that the radical right gets its biggest electoral boost in regions most exposed to Chinese exports. Within these regions communities vote homogenously, whether individuals work in affected industries or not.
Christian Dippel, Robert Gold, Stephan Heblich, 07 October 2016
The increasing polarisation of politics in the US in particular has spurred scholarly research on the potential links to increasing globalisation. This column focuses instead on Germany to investigate whether the rise of right-wing populism is associated with increased international trade. Regions most threatened by exposure to imports saw increases in support for far-right parties, while regions that benefited from export opportunities saw decreases. To counter this globalisation backlash, policy should aim to cushion the effects of trade exposure on the losers from globalisation.
Alex Edmans, 23 September 2016
During political campaigns, candidates often set their sights on CEO compensation as a target for potential regulation. This column considers the various arguments for regulating CEO pay and questions whether it is a legitimate target for political intervention. Some arguments for regulation are shown to be erroneous, and some previous interventions are shown to have failed. While regulation can address the symptoms, only independent boards and large shareholders can solve the underlying problems.
Timothy Hatton, 07 June 2014
In the recent European Parliament elections, right-wing populist parties made significant gains. Commentators have linked the rise of these parties to growing anti-immigration sentiment in the wake of the crisis. This column examines the extent to which public opinion has in fact shifted against immigration. Survey data shows that there was no Europe-wide surge in anti-immigration opinion between 2006 and 2010, although there was a marked change in Spain, Greece, and Ireland. This suggests that populist parties’ success cannot be attributed to anti-immigration sentiment alone.
Alberto Alesina, Paola Giuliano, 23 April 2009
Will Americans turn into “inequality intolerant” Europeans? Such a radical shift is unlikely, but this column argues that this crisis may be a turning point towards more government intervention and redistribution in the US. More and more Americans believe that hard work is insufficient to climb the income ladder and are expressing anger against “unfairly” accumulated wealth. Politicians should prefer wise policies but may be tempted by populist outbursts.