Political Economy of Globalisation
One of the most revered propositions in international economics is that opening up a country to trade in goods or to the movement of production factors will lead to efficiency gains.
The establishment of the GATT/WTO has extensively liberalized trade in goods, but new forms of protectionism have emerged. At the same time, while capital flows are often free across borders, the international movement of people continues to be restricted. The goal of this research programme is to understand the political factors that underpin these outcomes.
The program is structured along two main research lines. The first focuses on the role of political institutions in shaping international trade outcomes. In particular, researchers in GEP have studied the impact of organised groups on US trade policy; the role of strategic delegation motives on delegating Fast Track Authority in trade negotiations to the US president, and the effect that policymakers' horizon plays on their trade policy preferences. In a series of recent projects our researchers are also exploring the political factors that drive the choice between the two leading types of preferential trade arrangements, namely free trade areas and customs union. Finally, ongoing work investigates why trade coercion exercised through a multilateral organisation might be more likely to lead to compliance than coercion exercised unilaterally.
The second research line looks instead at the question of why major restrictions are applied to the international flow of people, and identifies a series of key mechanisms that are at work. GEP scholars have examined the drivers of individual preferences towards immigration, and the mechanisms through which individual preferences are aggregated into a policy demand. Focusing on a group of advanced destination countries, and using various representative surveys, they have found that economic factors, which work both through the labour market and through the welfare state, play an important role in shaping preferences. These papers have contributed to the ongoing debate in the literature, which has tried to determine the extent to which simple economic models can be used to explain preferences towards globalisation.
In a democratic society, voter preferences are key drivers of actual policy choices, but policy demand is also heavily influenced by the process through which preferences are aggregated. A series of recent contributions explore the effects that different preference aggregation mechanisms can have. In particular, research has been carried out on the role of pressure groups in shaping migration policy in the United States, and the impact of democratic decision making, captured by a simple median voter framework, in explaining the emergence of a common market in the European Union.
In a related series of papers, GEP researchers have also directly focused on the drivers of the behaviour of elected representatives in the migration policy making process, and in particular on the role that individual opinions at the constituency level can have in shaping these outcomes.