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.
Co-funded by Konrad Adenauer Stiftung
DIIS Report

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.

One generalised narrative across the countries is that advancing economic integration and liberalisation have disadvantaged lower-skilled workers.
Erik Lundsgaarde, DIIS

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.

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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.

 

Three core dimensions

The analysis points to three core dimensions to consider in order to understand the many layers in globalization scepticism.

1: Which aspects of globalization generate most concern among citizens
Some people perceive advantages and drawbacks of international economic integration. Others associate globalization with political changes they dislike, such as the delegation of sovereignty or intensified cultural exchange that can make people question what is happening to national identity. At the same time, globalization’s large umbrella may provide cover for other political and economic developments within countries that provoke discontent. Distinguishing citizens’ attitudes towards different facets of globalization remains an important area for further research and policy reflection.

2: How benefits of economic globalization are distributed
International economic integration can create more opportunities for certain groups of people. The impacts of globalization vary in relation to where individuals live, their sectors of employment and their skill levels. These differences shape citizens’ attitudes towards the value of globalization. Economic explanations for scepticism towards globalization cannot stand alone. They need to be supplemented with explanations such as individuals’ worldviews. However, attention to the consequences of economic integration for specific regions, occupational groups and different levels of education are important for identifying how scepticism about globalization can grow. In this context, it is important to recall that individuals possess multiple traits that influence their attitudes. The vulnerability of low-skilled workers to globalization may be linked to their sector of employment, while individual political preferences can reflect a combination of economic interests and feelings of national attachment.

3: The institutions and policies that influence how citizens and firms can benefit from globalization while being shielded from its negative consequences
In light of the Danish public’s high level of positive sentiment towards globalization, the report draws attention to the advantages of the Danish approach combining unemployment protection, flexible regulation of employers and investment in skills development. Although Germany and France have also promoted policies to compensate citizens for vulnerability linked to economic liberalisation and invest in their workforces, the process of upgrading skills through vocational training has a longer tradition in Germany than in France.
Variations in broader political forces such as the strength of trade unions shape the character of policy priorities enacted to manage globalization and provide another indication of the importance of thinking about how different elements of the political and institutional landscape interact to enable citizens to benefit from international economic integration.

 

 

 

 

 

 

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