Global Integration,

backlashes and
political responses

International Political Economy

Week 12-13
Prof. Işık Özel
 Political conflict-analyzed by Rodrik (2018)-(I)
2/22

Hechsher-Ohlin Stolper-Samuelson

Factor Distributive
endowment consequences WINNERS and
Factors model and intensity of liberal LOSERS
international
Mobility trade

• ¿Why is international trade is a controversial political issue?

 Political conflict analyzed
By Rodrik (2018)-II 3/22

hi-skilled (demand) )
Heterogeneity
of labor low-skilled (demand)

Liberalization of
international trade Distributive
effects on
industries
Liberalization of
and jobs
capital flows
 Political conflict analyzed
By Rodrik (2018)-IV 4/22

North Modest effects for most US workers

American
FTA Yet, substantial effect for a minority of
(NAFTA) workers (slower wage growth in the
regions affected, especially low-skilled)
 How is the direction (L-R)
of populism determined? 5/22

… According to Rodrik, it is about demand and supply

•Economic anxiety &

distributive conflicts
DEMAND •solid base
•yet, no direction Direction &
Content of
populism
•Narratives offered by the
SUPPLY populist leaders
 Institutions and politics
6/22

Domestic institutions
Welfare state and its shades
and their role to
Yet, ¿can it be sustained?
mitigate the risks of
depends on
global integration
• State capacity
• Willingness of the
political actors
 But, what is populism? 7/22

The common denominator is ANTAGONISM between two

groups= people (pure) VS. elites (corrupt)

‘a superficial (thin-centered) ideology that organizes politics

as an expression of people’s will’
(Mudde & Rovira Kaltwasser 2017, Murillo 2017)

a manipulating strategy used by a

carismatc leader who rules by the
direct support of her/his/their
followers, especially those who are
disadvantaged (Weyland 2002, Acemoglu et al. 2011)
Is de-industrialization
only affecting the US? 8/22
 According to Stolper-Samuelson,
liberalization of international trade… 9/22

Benefits the owners of abundant

Hurts scarce
A capital-abundant country…
Protectionists Pro-free
trade