Globalization and Electoral Outcomes: Evidence from Italy

Abstract

We study whether and to what extent the electoral dynamics in Italy over the 1994-2008 period can be explained by the development of economic factors associated with globalization. To measure the level of exposure to globalization for local labor markets, our main unit of analysis, we use the intensity of import competition from China and the presence of immigrants. Looking at parties' political positions and employing an estimation strategy that accounts for endogeneity and time-invariant unobserved effects across local labor markets, we find that both immigration intensity and exposure to import competition from China have contributed positively to the electoral outcomes of far-right parties, whereas only the former has produced a positive effect on the votes of right-wing and traditionalist/authoritarian/nationalist parties. On the other hand, neither of them has had an effect on far-left parties. Moreover, electoral turnout has responded negatively to an increased presence of migrants. While the above effects seem to work through the mediation of labor markets, the results suggest that other mechanisms at the level of local communities are also at play.

Markups, import competition and exporting

“…From 1995 to 2007, the value of Chinese imports in France increased seven-fold. This is in line with what happened in other advanced economies (Autor et al, 2013;Dippel et al, 2017;Caselli et al, 2018b). Over this period, Chinese imports grew faster than total imports in France and, therefore, the share of Chinese imports in total imports went up from just below 2% to over 6% on average.…”

“…WTO at the end of 2001) or by the increase in Chinese firms' productivity (Caselli et al, 2018b). It should be noted that also the instrument is calculated with the same firms' fixed weights used to construct the Chinese import share in France.…”

“…The rise of China in international markets and global value chains following its access into the WTO in 2001 is one of the most prominent examples of a trade shock that increases competition. Therefore, several papers have used this event to study the effects of trade on different aggregate outcomes, such as employment and wages (Autor et al, 2013;Dippel et al, 2017;Feenstra and Sasahara, 2017;Ciani and Mau, 2018) or voting patterns (Autor et al, 2016;Malgouyres, 2017;Dippel et al, 2017;Caselli et al, 2018b;Colantone and Stanig, 2018).…”

An exploratory study of populism: the municipality-level predictors of electoral outcomes in Italy

“…Lega in particular has focused on the negative consequences of immigration. In concordance, many results in the economic literature find that an increase in the number of immigrants causes an increase in votes for far-right parties in most European countries (Dustman et al, 2018, Halla et al, 2017, Levi et al, 2020, and this holds for Italy too (Barone et al, 2016, Caselli et al, 2019. However, the literature that specifically focus on populism provides mixed results on this, suggesting that migration may be part of a populist narrative more than a determinant of votes at local level (Colantone and Stanig, 2018a).…”

The Globalization Backlash: Exploring New Perspectives

“…Much of this research shows that the "China shock"-that is, the surge of Chinese imports into advanced industrial countries after its accession to the WTO in 2001-has had key political implications, including increasing popular support for extreme right-wing parties and for Brexit (Autor et al, 2013(Autor et al, , 2020Barone & Kreuter, 2021;Colantone & Stanig, 2018a, 2018bDippel et al, 2015). A number of analyses also focus on how heightened immigration has precipitated mass support for extreme right-wing parties and restrictive immigration policies (Caselli et al, 2020;Dancygier & Margalit, 2020;Edo et al, 2019;Halikiopoulou & Vlandas, 2020;Halla et al, 2017;Mayda, 2006).…”