Principal investigator: Bruno Benevit
Original title: Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure
Authors: David Autor, David Dorn, Gordon Hanson and Kaveh Majlesi
Location of the Intervention: United States
Sample Size: 432 congressional districts
Sector: Politics
Primary Variable of Interest: About Me
Type of Intervention: Exposure to imports
Methodology: OLS, 2SLS
Summary
The increased political polarization observed in the United States has raised several questions about its causes. Aiming to identify one of the factors contributing to this phenomenon, the authors of this article examined how increased competition for imports has impacted the positioning of voters in the country. The results indicated that counties exposed to imports have become more polarized and that there has been a general inclination of the American population to the right. Furthermore, there has been an increase in the prevalence of the Republican and Democratic parties according to the racial majority of the county's population, implying a reduction in the proportion of moderate Democrats elected regardless of the county's demographics.
- Policy Problem
The increasing rise of ideological division in the United States has been reflected in American political tension. This behavior has manifested itself through the political orientation of campaign donations and elected politicians from both the Republican and Democratic parties, which has been expanding since the late 1970s (Author). et al.(2020). From the 21st century onwards, the media consumption patterns of the public in the country also evidenced this phenomenon. While approximately half of those interviewed in the country supported moderate political positions in the 1990s and 2000s, this percentage decreased to 40% from the end of the 2000s onwards (Pew Research Center, 2014).
This period coincides with the increasing exposure of American labor markets to rising foreign competition from China. This exposure directly resulted in the significant and persistent decline in US manufacturing jobs, as well as reduced earnings for workers in the most affected sectors (Author). et al.(2020). The authors highlight that the increase in polarization is related to race and education level in counties affected by the expansion of commerce. As a consequence, ethnic-nationalist movements have become more relevant in the political positions of the Republican Party.
- Implementation and Evaluation Context
Insofar as financial crises and income inequality can lead to increased political polarization, the voting pattern in Congress is related to the economic context. Thus, the concentration of the impact of the China trade shock in specific sectors and regions makes the economic consequences of expanding trade between countries politically relevant. The concentrated and well-defined economic geography of the China trade shock allows us to establish relationships between economic shocks in the labor market and their political outcomes.
The largest increase in U.S. imports occurred shortly after China's accession to the World Trade Organization in 2001: China's share of world manufactured exports jumped from 4,8% in 2000 to 15,1% in 2010 (Brandt). et al., 2017). The increase in Chinese exports was driven by productivity growth induced by reforms in the manufacturing industry (Brandt et al., 2017). However, the productivity gains associated with these reforms diminished significantly by the end of the 2000s (Author et al..
In this sense, the authors evaluate the implications of the local labor market for electoral politics in the United States, considering displacement zones (ZDs). The study also assesses the impact of exposure to Chinese imports by sector and verifies heterogeneous effects resulting from demographic characteristics of the respective ZDs.
- Policy/Program Details
The article also utilizes various forms of expression of political engagement. To this end, three data sources were used: (i) public opinion survey data from Pew Research Center about the political beliefs of potential voters; (ii) data from Nielsen Local TV View about the audience of broadcasters with different political alignments (Fox News, with a more conservative tendency, and MSNBC and CNN, more progressive); and (iii) the measures from the Database on Ideology, Money in Politics and Elections (DIME) on campaign contributions. These data reveal how the demand for ideology observed in the American population unfolded in the period between 2000 and 2016.
The data from Pew Research Center Used to measure changes in voters' ideology over time, the study periodically administers questionnaires related to respondents' political beliefs. In each of the ten questions, participants choose which of two opposing statements on a topic, one leaning to the left and the other to the right, best reflects their opinion. Left-leaning and right-leaning responses are scored with values of -1 and +1, respectively. From the participants' responses, the measure of the distribution of political beliefs from left to right in the interval [-10, +10], the Pew ideology score, is defined. Voters were defined as liberal (score between -10 and -3), moderate (score between -2 and 2), and conservative (score between 3 and 10).
The data comes from Nielsen Local TV View Nielsen ratings track TV viewing in US households, measuring audience size for specific programs and programming times using electronic monitors connected to home TV sets and viewers' diaries. Nielsen ratings indicate the fraction of all households that have a TV tuned to a specific program at a given time. The authors considered average ratings for the period from 17 PM to 23 PM, Monday to Friday, covering the period from 2004 to 2016.
The data from DIME are collected through reports required by the United States Federal Election Commission, where campaign contributions by donor and recipient are tabulated for all amounts above $200. Based on this data, Bonica (2013) proposes the creation of a campaign finance score (CFS), establishing political alignment based on the net benefit between voting for candidates in general versus a specific candidate with opposing ideological positions.
- Method
To assess the effect of the shock caused by the expansion of Chinese imports on American electoral positioning, the authors use the average variation in the penetration of Chinese imports in the industries of each DZ. The DZs were established by dividing county cells according to their congressional district, establishing each cell for its respective DZ and weighting them by the share of the population eligible to vote. Regional trade exposure also considered the variation in exposure to Chinese imports by sector, weighting each sector by its initial share of employment in the DZ. This measure considered only the portion of growth explained by the expansion of Chinese export supply, disregarding demand shocks in the United States. To eliminate noise caused by resets in electoral districts, the authors made estimates disregarding observations from counties that experienced resets two years before a given election.
To understand how the expansion of trade with China has affected the political expression of American voters, the authors analyzed the impact on... market share This study investigated the audience figures for the three largest news networks in the country (Fox News, MSNBC, CNN), as well as the effect on campaign donations. To assess the impact on the audiences of the three networks, the authors used ordinary least squares (OLS) and two-stage least squares (2SLS) methods. Aspects such as age, race, time trends of the districts, and fixed effects of the distribution zones were controlled for.
The authors used the 2SLS method to evaluate the effect of EFC on campaign donations. Age and racial groups, as well as proportions of the female population, those with university education, those born in other countries, and those of Hispanic origin, were controlled for at the county level.
The study also estimated the effect on voter turnout among registered voters, the likelihood of electing a Republican candidate, and the share of district votes for Republican candidates, separated according to the degree of competitiveness between the parties (pro-Democrat, pro-Republican, or competitive district).
Next, the impacts on the ideological orientation of elected congressional candidates are evaluated, estimating the chance of victory for moderate candidates (both parties), liberal Democrats, and conservative Republicans. Additionally, heterogeneous effects were observed according to the racial majority of the counties. Both analyses controlled for demographic factors.
Finally, the authors adopted the 2SLS method to estimate the impact of expanding trade with China on presidential elections. The impact on the variation in the share of votes for Republican presidential candidates was analyzed between 2000 and 2008 and between 2000 and 2016. Again, demographic factors were controlled.
- Main results
The results for the analyses related to voter behavior indicate the presence of significant effects stemming from exposure to competition from Chinese imports. In general, the results regarding the impact of the expansion on the audience of the three largest broadcasters in the country indicated that the Fox News network saw an increase in its market share, showing an increase of around 5 percentage points (pp) during the period from 2004 to 2012. However, this increase came at the cost of declines for CNN and MSNBC.
Regarding the impact on campaign contributions, the results showed a significant 35% increase in contributions to liberal campaigns between 2002 and 2010, as well as significant increases of 22,6% in contributions to conservative campaigns. However, no significant results were identified for moderate candidates' campaigns, indicating a pattern of polarization in campaign donations.
The evidence found in the analyses related to the election results demonstrated that Republican candidates benefited the most. Republican candidates saw significant increases of 2,6 percentage points in registered voter turnout and 11,8 percentage points in their probability of election in districts more exposed to Chinese trade. Although no significant results were identified regarding the share of votes in districts, the evidence suggests that the increase in the probability of victory for Republicans was due to capturing votes in districts considered competitive between the parties.
Furthermore, the results of analyses related to the ideological position of the elected candidates corroborated the relative gains of Republicans, especially the more conservative ones. Although liberal Democratic candidates showed an increase in the probability of victory between 2002 and 2016, both the increase in liberal Democratic candidates and conservative Republican candidates was largely explained by a large reduction in the probability of victory for moderate Democratic candidates. When considering the racial profile of the counties, these trends are repeated, favoring conservative candidates in non-Hispanic white majority counties and liberal candidates in non-Hispanic white minority counties.
The results of the analyses on the effects on the presidential elections indicated that the convergence of voter behavior and preference for congressmen in favor of Republicans was converted into more votes for Republican presidential candidates. Considering the models with all covariates, the shock of the expansion of Chinese trade caused an effect of approximately 1 percentage point for the periods 2000 to 2008 and 2000 to 2016.
- Lessons in Public Policy
In this article, the authors demonstrated, through a robust methodology, that the districts' contact with the expansion of trade in Chinese imports had significant political repercussions in the United States. The more conservative wing of the Republican Party was the most favored political group in the congressional elections, a movement that occurred at the expense of the performance of the moderate wing of the Democratic Party. The electoral performance of the parties was corroborated by the behavior of voters in terms of contributions and viewership of news channels, indicating ideological consolidation on the part of voters. Naturally, this behavior was reflected in the presidential elections.
Furthermore, the trade shock experienced resulted in heterogeneous effects with respect to the race of the exposed counties. These results confirm the existence of racial pressures recently observed in the political debate in the United States. According to the authors, this connection is partially motivated by competition for resources based on opportunistic groups in the face of such tensions. This heterogeneity stems from demographic and geographic aspects, such that more labor-intensive regions were the most negatively affected in terms of job opportunities and wages, characteristically dominated by less educated men. The evidence from this study, therefore, suggests that the increase in political polarization in the United States is strongly related to the economic implications of the trade shock from Chinese imports into the country.
References
Autor, D., Dorn, D., Hanson, G., and Majlesi, K. (2020) Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure. American Economic Review, 110(10), 3139-3183.
Bonica, A. (2013) Ideology and Interests in the Political Marketplace. American Journal of Political Science, 57(2), 294-311.
Brandt, L., Van Biesebroeck, J., Wang, L., and Zhang, Y. (2017) WTO Accession and Performance of Chinese Manufacturing Firms. American Economic Review, 107(9), 2784-2820.
Pew Research Center. (2014) Political Polarization in the American Public.
