Power Asymmetry, Blame Assignment and Backlash Against Free Trade

• In Event: Analyzing the Micro-foundations of the Anti-Trade Backlash

Abstract

This paper tests a micro-foundation underlying the tendency for powerful countries in the trade negotiations to be more vulnerable to voter backlash at home. I argue that citizens who perceived the government to have more influence over the contents of the trade negotiations are more likely to demand compensation through a blame assignment mechanism. I test this argument with coordinated survey experiments conducted in the United States (i.e., powerful) and Japan (i.e., less powerful) that manipulate the causes of industry’s financial losses (natural disaster vs. trade agreement) as well as who suffered from it (farmers vs. manufacturing industries). The results suggest that when voters perceive their government to be powerful, their demand for compensation to losers from a trade agreement increases by 15-19 points. Respondents who perceive their government to be weak are more likely to oppose both compensation and free trade. Partisan polarization in the United States over merits of bailout fuels protectionist sentiments.

Author

• Megumi Naoi, University of California, San Diego