My research broadly examines how trade and foreign direct investment affect the economic welfare of labor and the ability of labor interests to influence policy, and the implications for economic openness. This is most evident in two areas of work. First, in a series of papers, I examine the role of labor unions in shaping openness to foreign direct investment and trade. Second, drawing on new insights from international economics, my work emphasizes the importance of examining trade and the activity of multinationals jointly when studying the distributional consequences, and subsequent politics, of economic globalization. In particular, the development of global production networks produces introduces new distributional concerns for labor, and impacts political bargaining power of labor.
Peer reviewed publications
Do investment disputes lead to lower foreign direct investment (FDI)? Recent studies argue that disputes make potential investors view the host country as riskier. Yet, a dispute, which reflects economic harm to the disputing firm, may signal new economic opportunities to firms hoping to enter the same industry. The competing pressures of risk and reward mean that the impact of disputes on FDI is ex ante unclear. However, we argue that the balance of risk and reward varies across industries. Specifically, we expect that rewards are increasing as a function of industry fixed costs. We test our hypothesis using new data on industry-level greenfield FDI between countries from 2003 to 2015. We find that a co-industrial dispute reduces investment in industries with low fixed asset intensity but not high fixed asset intensity. Overall, the results highlight the importance of theory and data that allow for heterogeneity of investors.
"The Conditional Nature of Publication Bias: A Meta-Regression Analysis." With Quan Li. Political Science Research and Methods. (Link)
Publication bias is pervasive in social and behavioral sciences because journals and scholars tend to reward and be rewarded for statistically significant findings. However, the determinants of the severity of publication bias are less well understood. We argue that publication bias depends on whether an independent variable is a key variable or statistical control in traditional regression modeling. The bias should be severe only for the key variable, which relates to a central question and hypothesis of a study. We offer an empirical strategy for evaluation using meta-regression, which can be applied to various research areas. As an illustration, we perform a meta-regression of 229 model estimates from 40 articles in the democracy-foreign direct investment literature. We find that publication bias is most severe when democracy is a key variable, but appears weak when democracy is a control. Our research demonstrates that empirical estimates for key and control variables follow different data generation processes and contributes to the study of publication bias and meta-analysis.
"Labor and Trade Protection in Comparative Perspective." With Rena Sung. Oxford Research Encyclopedia. (Paper)
“Consequences of an Anti-Corruption Experiment for Local Government Performance in Brazil.” With Kendall Funk. 2020. Journal of Policy Analysis and Management (paper)
Decentralization reforms, implemented to improve efficiency and service provision, pose a challenge for federal governments that would like to ensure that federal resources are used appropriately by local governments. To overcome this challenge, some federal governments have implemented costly oversight programs aimed at improving municipal governance. For instance, in 2003, the Brazilian federal government introduced a randomized auditing program with the goal of improving municipal performance by exposing episodes of corruption and mismanagement. Yet, we know little about whether these types of programs actually lead to improvements in local outcomes, especially in terms of service delivery. We argue that audits provide opportunities for learning that should improve performance outcomes. To test this argument, we examine municipal performance in over 5,000 Brazilian municipalities from 2001 to 2012. We utilize the random assignment of audits and estimate difference-in-differences regressions. We find that audited municipalities experience greater improvements in performance overall compared to unaudited municipalities, though the effect size is modest. We also find evidence that the auditing program indirectly improves municipal performance. These results indicate that top-down oversight programs, like the Brazilian one, are useful not only for improving transparency and accountability, but also for the provision of public services as well.
How Do Capital and Labor Split Economic Gains? With Rena Sung and Quan Li. 2020. Review of International Political Economy. (paper)
Recent debates about the 1% vs. 99%, CEO compensation, minimum wage, and income inequality suggest an increasingly unfavorable division of economic gains for labor. Indeed, how capital and labor divide the gains from production is central to the study of political economy. Yet, prominent measures featured in the research to date suffer from a number of shortcomings. We argue that the division of gains between labor and capital can be more accurately and precisely conceptualized and measured as the ratio of labor compensation over operating corporate profits in the private sector. Using newly collected private-sector data from 17 industrial democracies over 30 years from 1981 to 2012, our analysis demonstrates important patterns. First, labor compensation and corporate profits both rose in absolute terms over the last three decades, but the compensation-profit ratio experienced a sharp decline, which suggests the improvement was smaller for labor than capital. Second, rising economic openness and declining union density contributed to the fall of the compensation-profit ratio. Finally, there was a clear cross-national convergence toward declining compensation-profit ratio, rising globalization, and decreasing union density. We conjecture that these results point to the movement of advanced industrial democracies toward a new capitalism equilibrium.
Foreign direct investment (FDI) is an important source of capital and governments often actively court FDI as a tool for development. Although the entrance of a multinational firm can generate a substantial boost for the local economy, including through the creation of jobs, it also generates competition for domestic producers. To understand how this activity affects election outcomes, we must consider that policy responsibility for FDI often rests with subnational governments. I argue that the nature of the geographic distribution of winners and losers from individual investment projects across subnational units is such that FDI generates localized net increases in the welfare of voters in the recipient economy. Thus I hypothesize that new investment will increase the electoral success of the incumbent party. I use project-level investment data to test this hypothesis in the context of Brazilian mayoral elections between 2004 and 2012. I find that the announcement of a new investment project increases the probability the incumbent party wins re-election. The findings suggest a channel through which globalization directly affects mass politics at the subnational level.
“Why Do Democracies Attract More or Less Foreign Direct Investment? A Meta-Regression Analysis.” (2018). With Quan Li and Austin Mitchell. International Studies Quarterly 62(3): 494-504. (paper and supplemental appendix).
A large body of research has examined the relationship between democracy and foreign direct investment (FDI). Scholars have offered numerous arguments about why democratic institutions encourage or discourage FDI. Yet almost all extant empirical work concerns whether democracies receive more or less FDI than non-democracies; direct empirical evidence on the underlying theoretical mechanisms is scant. In this paper, we seek to fill this gap in the literature. We argue that by performing meta-regression analysis, we can test whether a proposed mechanism is consistent with observable evidence across previous studies. We apply meta-regression to 229 model estimates from 40 prior studies. Our analysis produces three major findings with respect to theoretical mechanisms, measurement of FDI, and publication bias. First, the arguments about property rights, exchange rate volatility, and political constraints receive robust support among studies of the level of FDI inflows, and the mechanisms of growth and domestic political risk receive relatively robust support among studies of FDI inflows as a share of GDP. Second, the determinants of the effect of democracy on FDI differ between the two FDI measures. Third, we uncover strong evidence of publication bias in the literature. These findings have important implications for future research.
The movement of jobs overseas, known as offshoring, is an increasingly salient concern for many individuals, as technological innovations and expanding global production have increased the number and type of jobs that can be performed abroad, especially in services. Fragmented production has transformed the competitive pressures from trade, which now occur at the level of individual jobs, rather than the sector or firm level. As a result, occupation characteristics are a key determinant of how trade affects workers, and thus individuals’ trade preferences. We offer a novel theory to explain this: we argue the welfare consequences of trade are determined by (1) whether an individual’s job tasks can be provided from a distance, i.e. its offshorability, and (2) whether jobs tasks are competitive internationally. We find support for our theory using data from the 2003 and 2013 International Social Survey Programme modules for high-income democracies. Our results suggest that occupational characteristics are important determinants of trade preferences, offering additional understanding of the sources of protectionist sentiment even after controlling for labor market characteristics suggested by the conventional wisdom.
“Exposure to Offshoring and the Politics of Trade Liberalization: Debates and Votes on Free Trade Agreements in the U.S. House of Representatives, 2001-2006.” 2017. International Studies Quarterly. (Paper and supplemental appendix)
The movement of jobs overseas, known as offshoring, is one of the most politicized aspects of globalization in developed countries. One reason for the continued salience of offshoring is that it reflects growth in competitive pressures from globalization directed towards individuals’ jobs. In a world of fragmented production, vulnerability to offshoring (an occupation characteristic) can help explain patterns of protectionist sentiment not accounted for by the existing literature. In the short-run, adjustment costs and the salience of these costs mean that vulnerability to offshoring generates protectionist sentiment in the aggregate. Therefore, legislators should be more likely to oppose trade liberalization when a larger share of their constituency is vulnerable to offshoring. I measure vulnerability to offshoring at the district level using data from the U.S. Census. In an analysis of roll call votes on free trade in the House of Representatives between 2001 and 2006, I find that legislators are more likely to vote against free trade and are more likely to discuss the costs of trade for workers in floor debates when a larger share of their constituents is vulnerable to offshoring. The results suggest that offshoring introduces a new dimension to the political economy of trade.
"Open Economy Politics and Brexit: Insights, Puzzles and Ways Forward." With Stefanie Walter. 2017. Review of International Political Economy 24(2): 179-202. (gated)
In this paper, we first present a brief overview of IPE research in the Open Economy Politics (OEP) tradition. We then discuss the insights OEP provides that help us to better understand the referendum vote and Brexit politics, Brexit, but also emphasize that they present a number of puzzles for OEP-inspired researchers. Based on this analysis, the final section suggests avenues for taking the OEP research program further.
''The Political Power of Organized Labor and the Politics of Foreign Direct Investment in Developed Democracies.'' 2015. Comparative Political Studies 48(13):1746-1780. (paper and supplemental appendix)
How does organized labor shape restrictions on inward foreign direct investment? Distributional consequences, drawn from heterogeneous firms theory, suggest that although inward FDI benefits a subset of workers, a greater number of workers is hurt by inward FDI, leading labor in the aggregate to support restrictions on inward FDI. I argue that the political power of labor is determined by the position of labor vis-aÌ€-vis other actors in society and the unity of laborâ€™s policy preferences. The share of the labor force that is unionized determines the relative importance of labor interests, while union concentration determines whether the aggregate policy position of organized labor is unified or fragmented. In an analysis of 19 developed countries from 1971 and 2000, I find evidence that greater union density leads to more restrictions on inward investment when unions are concentrated.
''Does Economic Globalization Influence the U.S. Policy Mood?: A Study of U.S. Public Sentiment, 1956-2009.'' With Dennis Quinn. 2016. British Journal of Political Science 46(1):95-125. (paper and supplementary materials)
Does increasing economic globalization of the U.S. influence aggregate policy mood toward the role and size of government? Drawing on insights from IPE scholarship, we suggest that the impact of trade on aggregate preferences will depend on citizens exposure to trade. We hypothesize that employees of import-competing, export-oriented and multinational firms will adopt a 'compensatory' model whereby higher levels of imports (exports) lead to a liberal (conservative) shift in policy preferences for more (less) government. We distinguish between intrafirm and non-intrafirm trade flows. We measure policy mood using Stimson's 'Mood', and estimate Error Correction and Instrumental Variable models. Trade flows strongly influence Mood in a manner consistent with hypotheses drawn from IPE and Heterogeneous Firms trade theory.
Although inward foreign direct investment (FDI) has many benefits for a country as a whole, like trade, it is a source of competition for producers in the host country, with concomitant effects on labor markets. The entrance of foreign multinationals increases demand for skilled labor at the expense of unskilled labor, and also increases the elasticity of demand for labor demand because multinationals are able to shift production across borders. This begs the question of whether labor has any impact on inward FDI restrictions or not. I suggest that organized labor is a key determinant of the influence of labor on FDI restrictions. Not only do unions mitigate the collective action problem facing labor, but unionized workers, regardless of skill level, have incentives to support restrictions on inward FDI because rising elasticity of demand restricts bargaining power. I expect that higher levels of unionization will lead to greater restrictions on inward FDI. I find support for this hypothesis in an analysis of U.S. industry-level formal restrictions on inward FDI between 1981 and 2000. Industry skill intensity, a proxy for the distributional consequences of FDI for labor, does not explain variation in barriers to inward FDI, suggesting that the confluence of interests and influence is necessary for labor to influence policy.
''International Institutions and Credible Commitment of Non-democracies.'' 2011. The Review of International Organizations 6:141-162. With Songying Fang. (paper)
How do non-democratic countries credibly commit to policies in front of domestic and international audiences? Unlike democracies, non-democracies do not have functioning electoral systems and free presses to make their commitments costly thus credible. Yet, the need to credibly commit to a policy arises for non-democracies as well. In particular, when non- democratic leaders push for economic reforms, they need to coordinate the beliefs of domestic groups and attract international resources. How do non-democracies solve the commitment problem and succeed in achieving their policy goals? In this study, we argue that international institutions provide an important mechanism through which non-democratic countries could credibly signal their commitment to open economic policies. We test the argument with the involvement of IMF programs by post-communist countries from 1989 to 2005. We find that while IMF status is used as a credible commitment device for all countries, the effect is more significant for non-democracies.
"Economics of Populism." 2019. Global economic governance in the new era of globalization, edited by Arancha González Laya and Marion Jansen. (Draft)
“Labor and Protectionist Sentiment.” 2015. In the Oxford Handbook on The Politics of International Trade, edited by Lisa Martin. Pages 119-137.
“Firms vs. Workers? The Politics of Openness in an Era of Global Production and Automation.” paper
The nature of production has changed in important ways. Firms are increasingly able to replace parts of the production process previously performed by domestic workers with foreign workers or machines. What automation and globalization have in common is that they break up the tasks performed by individual workers. Workers in certain occupations are more vulnerable to the negative labor market consequences created by these forces. In this paper, I provide an integrated theory of the labor market implications of global production and automation using the tasks framework. I focus on how firm strategies shape the welfare consequences of workers and consider what this can tell us about the formation of preferences across multiple policy areas. I hypothesize that workers in routine-task intensive occupations will be more protectionist with respect to globalization, hostile to European integration, and more likely to favor government redistribution and support a left party. This effect should be larger among those workers vulnerable to offshoring. I test these claims using data from the ISSP and the ESS.
"Low skill products by high skill workers: The distributive effects of trade in emerging and developing countries." With Irene Menendez and Stefanie Walter. Under review.
The canonical models of trade in the IPE literature predict that low skill workers are the primary beneficiaries of free trade in the developing world. But empirical evidence shows that high skill workers benefit from and support free trade more in these contexts. We argue that although developing countries have a comparative advantage in low skill products, these products are produced by workers that are highly skilled relative to the average worker in these countries. As a result, trade and global production benefit relatively high skill workers, especially those exposed to trade. This explains why inequality is rising in these countries and why this group is most supportive of free trade. We illustrate some micro- and macro-level implications of our argument using cross-national survey data and aggregate data on trade and inequality. The findings have important implications for the political economy of trade and global production in developing countries.
Writings on policy
"AS A NEW TRADE AGREEMENT FOR MEXICO, CANADA, AND THE UNITED STATES IS DEBATED, MORE REALISTIC POLICIES ARE NEEDED TO SUPPORT WORKERS". Scholars Strategy Network briefing.
Additional peer-reviewed publications
''Islamic Religiosity and Regime Preferences: Explaining Support for Democracy and Political Islam in Central Asia and the Caucasus.'' 2012. Political Research Quarterly 65(3): 499-516. With Kathleen Collins.