Voter and Legislator Responses to Localized Trade Shocks from China in Brazil

Abstract

This paper examines whether localized trade shocks from China influence Brazilians’ views on integration with the country. We test the following hypotheses: (1) as trade shocks are localized, views on trade should form at the local, rather than at the individual level, and (2) as localized trade shocks affect both workers and companies in a same region, they should also influence legislators’ views on China. Our analyses find support for both claims, but only among losers from Chinese trade. Residents and legislators from localities hurt by import shocks tend to hold negative views about economic ties with China, whereas neither residents nor legislators from localities benefitted by export shocks exhibit more positive views about the country. Our paper contributes to the literature on the politics of trade by incorporating meso-level theories of trade preference formation and by establishing the conditions under which the interests of constituencies should shape legislators’ views on international trade.

Turning Away From the State: Trade Shocks and Informal Insurance in Brazil

“…For example, Colantone and Stanig (2018b) demonstrate that import shocks from China increased the support for the radical right, nationalist and isolationist parties. Furthermore, Campello and Urdinez (2020) show that both legislators and voters developed more negative attitudes towards China in Brazilian local labor markets negatively affected by Chinese competition. These findings suggest that the negative consequences of trade may foster xenophobic and protectionist political responses.…”

“…My empirical strategy is based on a shift-share instrument, in the spirit of the one proposed by Bartik (1987). Many authors recently applied a similar approach both in political science and economics (Autor et al, 2016(Autor et al, , 2020Colantone and Stanig, 2018a,b;Campello and Urdinez, 2020;Baccini and Weymouth, 2021). As I show in figure 1, the drop in exports began in 2012.…”

“…Therefore, microregions (henceforth, regions) are the ideal unit of analysis for this research. This is also the level of analysis applied by previous work that uses shift-share instruments in the Brazilian context (Dix-Carneiro, 2014;Costa et al, 2016;Campello and Urdinez, 2020). Formally, I define the export shocks as…”

“…To test these hypotheses, I examine three consecutive Presidential elections in Brazil (2010Brazil ( , 2014Brazil ( , and 2018. Similarly to previous research in economics and political science (Autor et al, 2016;Colantone and Stanig, 2018b,a;Campello and Urdinez, 2020;Costa et al, 2016;Baccini and Weymouth, 2021), I measure the exposure of local labor markets to the drop in Brazilian exports between 2011 and 2018 by constructing a shift-share instrument (Bartik, 1987;Goldsmith-Pinkham et al, 2018;Borusyak et al, 2018). I rely on electoral and census data to analyze the effect of the export shock on changes in PT vote shares in this period in regions with different concentrations of CCTs beneficiaries and Evangelicals.…”

How Voters Respond to Currency Crises: Evidence From Turkey

“…Cross-border flows of goods and people influence domestic political outcomes. A burgeoning literature shows that individuals’ policy preferences and voting behavior are influenced by surges of immigration (Baerg et al, 2018; Dustmann and Vasiljeva, 2019; Hangartner et al, 2019) and rising exposure to international trade (Campello & Urdinez, 2021; Colantone & Stanig, 2018a and 2018b; Hays et al, 2019; Margalit 2011). Interestingly, several studies find that individual responses to trade and migration shocks are not driven by concerns about economic self-interest (Colantone & Stanig, 2018a and 2018b; Hangartner et al, 2019; Hays et al, 2019).…”