Electoral rules, Social identity, and Political Responses to Trade Wars

The recent resurgence of protectionism, notably in the United States, raises new questions about the effect of domestic political institutions on policy responses. We investigate how electoral institutions and social identity shape policy responses to international trade wars. We analyze a theoretical model of political competition over trade policy under alternative electoral institutions. Building on recent political economy frameworks incorporating social identity, the model captures that both self-interest and national identity shape voters’ policy preferences. Trade wars can increase the salience of national identity, thereby making voters that do not benefit from protection directly more willing to shoulder some of its costs. The model predicts that more proportional electoral rules amplify the protectionist policy response. We empirically test this prediction using a difference-in-difference analysis of roll-call votes in the Swiss parliament, exploiting within-country variation in district magnitude. Consistent with the model, we find that legislative support for trade protection, following tariff increases under the first Trump presidency, rose more in districts with larger district magnitude. Our results link the literature on globalization backlash, social identity, and electoral institutions in new ways.

 

Irene Menéndez González is Assistant Professor in International Political Economy at the IE School of Politics, Economics and Global Affairs at IE University in Madrid. Her research interests lie at the intersection of international political economy and comparative political economy, with special emphasis on the political consequences of globalization, as well as welfare states and interest representation in Europe and Latin America. In recent work, she focuses on the politics of informality and public goods provision. Before joining the faculty at IE University, Irene was an Assistant Professor at the University of Mannheim, a research fellow at the Institute for Advanced Study in Toulouse (2017-2018) and a post-doctoral fellow at the University of Zurich (2014-2017).