Policymakers and Trade Legislation
Memo: Robert Lawrence
Discussant: Fiona McGillivray
• 10 yrs ago– interviewed newly retired
Senator John Danforth (MI).
• Over 20 years in Senate
– Finance Committee.
– Pro-free trade, unless footwear or autos.
• Danforth key player– agenda setting in
committee and crafting legislative
coalitions.
Two Points
• Policymakers Preferences
• The survey questions legislators about
who asks for trade assistance.
• But who do politicians listen to, and what
can they do to help?
Two Points
• Constituent Preferences.
• what is the connection between voters
views on globalization and their social
network.
• Andrew Gelman get social network info
from a non-network sample.
The Harvard Globalization Project
• Sample approx 100 legislators per
country– “targeting those in electoral
districts in which selected firms/industries
are heavily concentrated.”
• in-depth interviews with specific
legislators.
Survey Questions
• In general, do you favor, or oppose policies
aimed at increasing trade with other nations?
• Roughly what proportion of these letters and
phone calls raise concerns about trade with
foreign nations or outsourcing?
Survey Questions
• On the issue of increasing trade with other
countries, what position would you say is
held by the majority of your constituents? Are
they generally in favor of trade, generally
opposed, evenly divided, or are you unsure?
• Which industries and groups in your
constituency are generally the strongest
opponents (supporters) of policies aimed at
increasing trade with other nations?
Extra Questions
• In your district, where do trade policies come
from—the executive, individual legislators,
Cabinet, Europe?
• You’ve now told me that trade policy comes
from….. But suppose you want to aid an industry
in your constituency—what can you do to help?
–
–
–
–
–
Approach other legislators
Approach the party
Use publicity to raise national awareness?
Help organize workers.
Other…
Extra Questions
• If an industry in your district is on the verge of
closing—what do you think is the most
appropriate policy response from government?
–
–
–
–
–
–
subsidize
nationalize
trade protection
redundancy payments.
Retraining of workers
Take no action
Possible Questions
• The industries you want to help, are they
in your constituency?
Supply-side Theory
• Survey random 100 legislators in every
country— theory predicts legislators will
have different induced preferences given
institutional incentives.
– US weak party, small single-mb districts
– UK strong party, small single-mb districts
– Belgium strong party, large multi-mb districts
Multiparty systems
• Multiple parties represented in legislature.
– 100 legislators needs to include legislators from each
major political party.
• Coalition politics– general question
• Does the type of assistance sought affect the
coalition formation and passage of policy? i.e. to
get a retraining program would you try a different
approach to getting a subsidy to your industry.
Multiparty systems
• Multiple candidates per district– can match
with party supporters in district but might
be useful to know which industries
different parties want to help.
– 10 years ago, which industry groups did your
party seek support?
– Today, which industry groups does your party
seek to support?
– If they have changed, why?
Survey of Workers
• In general, do you favor or oppose policies
aimed at increasing trade with other nations?
• Lots of questions on employment history—are
you worried about losing your job.
• (If employed) Do you think that increased trade
with other nations makes you own job more
secure, less secure, or does it have no clear
effect?
Where do voters get their information?
• Lawrence– uncertainty about how trade
policy affects economic interests. The info
voters receive and the mechanisms
through which they filter this info matter.
• Diffusion of information through social
networks.
Andrew Gelman: social network info
from a non-network sample.
• How many people do you know who have
gone to jail?
• How many people do you know?
• Simple way of figuring out how important a
particular group are in your social network,
plus use this info to estimate that group size
in population.
Gelman’s Scale-up Method.
• How many people do you know named Nicole?
• Suppose, on average, you knew 0.6 Nicoles.
• Assume 0.13% of Americans are named Nicole.
• Assume 0.13% of your acquaintances are
Nicoles.
• Estimate, on average, you know 0.6/0.0013=450
people.
Gelman’s Scale-up Method.
• On average, you know 2.6 lawyers
• Assume network size is 450 people
• Estimate, lawyers represent 2.6/450=
0.58% of the network.
• Estimate: 0058*290million=1.7million
lawyers.
Gelman’s Scale-up Method.
• On average, you know 2.6 people who
were made redundant.
• Assume average network size is 450
people.
• Estimate: redundant workers represent
2.6/450=0.58% of social network.
• Estimate 0.0058*290million=1.7million
redundant.
Extra Questions
• How many workers from your job do
you socialize with?
• How many lawyers do you know?
• How many foreigners do you know?
• How many construction workers do you
know?
Extra Questions
• In the firms where you work, how many
other firms do you deal with on a regular
basis?
• How many of these are not in the United
states.
Voter Information
• Survey questions on Knowledge
• Do you happen to know what job or
political office Dick Cheney now holds?
• Do you happen to know which party has
the most members in the House of
Representatives in DC?
Possible Questions
• Who is David Ricardo?
– A soccer player for Real Madrid
– A dead economist
– The head of the World Bank.
– Never heard of him.
• What does the WTO do?
– Meeting of G7 to discuss finance
– Organizes trade negotiations
– Pro-Wrestling organization.
Trade policy as Private or Public Good.
• little nostalgia these days in the UK for
declining British industry.
• Rover plant at Longridge finally closed
down. 5,000 jobs are going to China.
• National icon—BBC viewer opinion
website, no sympathy.
BBC “Your Reaction”
Rover closure.
• “I have been made redundant four times. No-one from the
government came to aid with a compensation package.
Rover workers need to realize times have changed. It is
totally unfair to everyone else who has lost jobs if they get
taxpayers’ money.”
– Philip Johnson, Telford, England.
• “I work in construction and was made redundant four times
in the recession of the 90s and take poorly paid jobs to
survive. There was no rescue package for me. I’m against
tax-payers money being used to bail out a private company.
The workers should pick themselves up of the floor, stop
whinging, and move on like what I and many of my
colleagues had to do.”
– Martin, Birmingham, England.
Possible Questions
• Have you ever been made redundant? If
so, how many times?
• Do you support state intervention for a
failing industry?
Conclusion
• Question politicians on how they supply
policy.
– In-depth interviews?
• How do social networks filter workers
information on globalization.