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Title: The politics of compensation under trade : openness, economic geography and spending
Author: Menendez Gonzalez, Irene
ISNI:       0000 0004 5357 4833
Awarding Body: University of Oxford
Current Institution: University of Oxford
Date of Award: 2015
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This thesis examines the conditions under which democratically elected policymakers are more likely to provide policies that compensate individuals that lose from international trade. It develops and empirically tests a theoretical framework of compensation in open economies that accounts for differences in the degree to which governments benefit losers from trade. It first develops a theory of preference formation based on economic geography, and then argues that electoral and legislative institutions jointly condition the supply of compensation. The theoretical analysis provides three sets of observable implications evaluated using micro- and macro-level data in Europe and Latin America. First, exposure to international competition increases demand for policy that compensates for the costs of trade, but this effect is more pronounced among those individuals in economically specialised and uncompetitive contexts where reemployment in the event of a shock is difficult. Second, policymakers in proportional electoral systems face weak incentives to target trade losers in geographically concentrated and uncompetitive regions. In contrast, majoritarian institutions generate incentives to increase compensation when trade losers are geographically concentrated. Another implication is that under some conditions, the presence of a strong upper house that represents regional interests dampens the provision of compensation, and the relative effect of electoral rules. The empirical implications of the argument are tested using a multi-method research strategy that combines cross-national and case study analyses and draws on quantitative and qualitative techniques. Chapter 3 tests the micro-level implications of the model using survey data for European regions over 2002-2006. The findings indicate that regional economic specialization and regional competitiveness jointly condition the impact of trade on preferences for compensation. Chapter 4 systematically tests the extent to which the geographical concentration of trade losers conditions the effect of electoral institutions on levels of compensation. It uses panel data from 14 European countries from 1980 to 2010. The findings indicate that where trade losers are concentrated, lower district magnitude leads to more compensation. Chapters 5 and 6 conduct case studies of compensation in Spain and Argentina, both countries that underwent deep liberalisation and offer significant variation at the regional and institutional level. Chapter 5 explores preferences over compensation in selected regions in Spain and Argentina, and shows that regional specialisation and competitiveness were important in shaping levels of support for compensation. Chapter 6 examines the role of electoral institutions and legislative veto bargaining in shaping the politics of compensation in Spain and Argentina.
Supervisor: Rueda, David Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Europe ; Latin America ; Social Sciences ; Political economy of markets and states ; Macro and international economics ; Democratic government ; Public policy ; Social policy & social work ; comparative political economy ; international political economy ; labour market policies ; economic geography ; globalization ; electoral institutions