The electoral consequences of compensation for globalization

Abstract

As opposition to globalization grows, many governments seek policy responses. One response – the European Globalisation Adjustment Fund – provides support to workers in European Union member states who are made redundant as a result of globalization. Proponents argue that by offsetting some of the costs of globalization, the programme may bolster public support for international economic integration and the political parties that support it. I investigate the impact of the European Globalisation Adjustment Fund on voters’ support for protectionist political parties using a difference-in-differences research design and official election results at the district and commune level. I also examine individual-level voting data. I find that in regions exposed to rising imports, assistance from the European Globalisation Adjustment Fund generates a small decrease in the vote share of one of Europe’s most prominent anti-globalization parties, which ranges in magnitude from 0 to 1.5 percentage points. While consistent with the logic of embedded liberalism, the finding suggests that the theorized connection between compensation and support for globalization may be conditional rather than categorical.