Monday, March 29th 2021
Hayley Pring (Oxford), “Do Populists Trade Differently?”
Abstract: The literature on the globalization backlash makes implicit links to the concurrent rise of populist leaders in democracies. Despite this, very little research has investigated whether populist leaders are complicit in the backlash against the global trading regime. This article develops the first theory of trade agreement design by populist leaders that explicitly analyzes the audience cost logics in democracies. Leaders design Preferential Trade Agreement’s(PTAs) to credibly signal to their domestic audiences their economic policy intentions. Rather than aggregate PTAs signed, I use PTA design (depth and flexibility) to measure the extent of trade liberalization. I argue that populist leaders are more independent from their party, appeal directly to the public for election, and distance themselves from ‘the elite’. In doing so, they face greater audience costs when they engage in rent-seeking behavior or fail to signal to their audience that they are providing a public good. In contrast non-populist leaders face a mixture of pressure from the public, their party, and special interests which dilutes the pressure they feel to sign deeper PTAs. I find that sensitivity to electorate audience costs drives populist leaders to sign deeper PTAs than non-populist leaders. Additionally, I find that during economic downturn, when public opinion ‘switches’ to protectionism, populist leaders signal their changing policy commitment by signing shallower PTAs. I test this theory using a global dataset of populist leaders (2000-2018), and I supplement the main analysis with granular data on targeted tariffs. The findings suggest that populist leaders are not driving the backlash against the global trading regime, instead these leaders are more sensitive to public opinion and audience costs.