Longitudinal Analysis of Public Opinion on Trade: Evidence from Latin America

• In Event: Trade Preferences in Developing Countries

Abstract

How stable is public support for free trade? When does public opinion turn toward protectionism? In recent decades, scholars have sought to understand mass opinion on globalization by examining differences between individuals in support for free trade principles and policies. In general, IPE theories predict trade opinion based on the interests individuals have as factor-owners, skill-holders, consumers, and social group members (Oatley 2017, Owen and Walter 2017). Most of the empirical evidence rests on surveys in one country at a time, usually limited to advanced industrialized economies. However, we still do not know much about cross-national aggregate opinion on trade and its temporal shifts between demanding protection and welcoming open borders. This omission is especially grave for developing countries, where factor endowments and education systems greatly differ from those in the industrialized world. Moreover, there have been several shock-style experiences of trade liberalization in places long dependent on trade government revenue and subjected to import substitution industrialization (Bastiaens and Rudra 2018, Milner 1999, Rodrik 1994).
This paper addresses the variation in cross-country levels and temporal shifts in aggregate opinion on trade in developing democracies. The research design focuses on 15 low- and middle-income Latin American democracies in 1990-2015, a period covering significant trade liberalization followed by popular and policy backlashes in some cases, and further deepening of integration into the global economy in others. I construct an original database of annual country measures of public sentiment towards trade, applying a modified principal component analysis using dozens of irregularly-spaced survey items. Results from time series univariate and regression models show, first, that public opinion on trade changes over time and that there are different trends across countries. Second, that aggregate attitudes follow macroeconomic conditions. Job insecurity and worsening living conditions make people anxious and lead them toward protectionist views. Finally, exposure to globalization erodes the public sentiment towards open commerce in countries with no encompassing policies to retrain and support low-productivity workers and producers. These findings have broader implications for the study of globalization and citizen attitudes in the developing world.

Author

• Ignacio Mamone, University of Pittsburgh