Scepticism towards globalization is about more than the unequal distribution of wealth
The result of the recent Italian election follows a string of political contests from Brexit to remind us that while governments often view international economic integration as a path to increasing prosperity and wellbeing, there is a trend of anti-globalization sentiment - a “globalization backlash” - influencing elections in western democracies.
Many European governments shiver when they look beyond their borders at arguments driving the Italian election campaigns and they shiver again when they turn their eyes home and see the same globalization scepticism in their own countries.
“Explaining Globalization Scepticism” is a new DIIS report that asks what drives negative attitudes towards economic globalization.
Many studies of individual attitudes towards economic globalization take the unequal distribution of economic gains or losses due to free trade as a starting point. In economies where highly skilled labour is abundant, benefits from free trade are likely to flow towards workers with a higher level of education while low-skilled workers may be disadvantaged. Certain sectors of economic activity may also be more exposed to competition from increasing international economic integration, leaving workers more vulnerable.
The Danish public shows a high level of positive sentiment towards globalization; expressed, for instance, in a relatively positive attitude towards free trade. In this light, the report draws attention to the advantages of the Danish approach combining unemployment protection, flexible regulation of employers and investment in skills development.
Employment-related categories are not the only way of distinguishing winners and losers of globalization. For example, low-income consumers may benefit more from free trade than high-income consumers. Gains or losses from globalization may also vary by geographical location, depending on the nature of economic activity in different regions.
Acknowledging globalization scepticism
Governments for their part implement policies that on the one hand enable citizens and companies to participate in a competitive global economy while on the other hand protecting them against its negative effects. The report states that governments interested in maintaining support for globalization need to examine how the mixture of such policies benefits both societies at large and particular societal groups within it.
The recognition of rising globalization scepticism can be a healthy stimulus for reflection on the choices that governments make in managing international economic integration and how they can improve their performance in this area in the future.
The subject is not straightforward. Globalization means different things to different people. Some citizens are against globalization because they are against multinational corporations while others are in favour of corporations but negative towards the way their government handles international economic integration. Sometimes, perceived consequences of globalization actually reflects other changes that are difficult to isolate from globalization with technological development as a prime example.
About this Long Read
This Long Read introduces DIIS report 2018:02 "Explaining Globalization Scepticism" by Erik Lundsgaarde. The report can be downloaded here or ordered free of charge from diis.dk