text: Economic Geography, Politics, and the World Trade Regime
  Published online by Cambridge University Press: 14 March 2022, pp. 367-379
  Although globalization and the world trade regime have reduced the significance of distance between countries, within countries geography matters now more than ever. Inside countries' borders, economic activities, such as production and employment, occur unevenly across space. As a result, international trade impacts parts of a country differently. Some areas benefit from rising trade, while others experience reductions in local wages and employment as a result of increased import competition. Because regions' experience of globalization varies, public opinion about trade differs across geographic areas within countries. Voters living in regions advantaged by trade are more likely to support economic openness, while voters living in regions negatively impacted by trade are more skeptical of the benefits of globalization. The geographic disparities in public attitudes towards trade often align with salient political cleavages. As a result, debates over trade have become increasingly polarized in many countries, which may threaten states' continued economic openness as well as their engagement with, and even support for, the world trade regime.
  Incumbents Beware: The Impact of Offshoring on Elections
  Journal: British Journal of Political Science / Volume 52 / Issue 2 / April 2022
  Published online by Cambridge University Press: 05 March 2021, pp. 758-780
  How does globalization affect politics? One of the most controversial aspects of globalization is offshoring, when manufacturing operations and business functions move abroad. Although voters generally dislike offshoring, it remains unclear how moving jobs abroad impacts democratic elections. Using a difference-in-differences estimation strategy, the author finds that incumbent government parties lose more votes in municipalities where a local plant moved production abroad between elections than in municipalities that did not experience such an event. The result holds across various time periods, different incumbent parties and diverse types of elections. In both national and regional elections, voters punish incumbent government parties when a local firm moves production abroad. Incumbent parties' vote shares fall as the number of jobs lost due to offshoring increases. In multiparty governments, voters disproportionately punish the largest coalition party for offshoring. The results of an original survey administered in Spain verify the importance of offshoring for voters' retrospective evaluations of incumbents.
  Stephanie J. Rickard , London School of Economics and Political Science
  Book: Spending to Win
  1 - Who Gets What and Why?
  Print publication: 19 April 2018, pp 1-26
  Institutions and geography together shape economic policies. Policy outcomes are agreed by incumbents whose decisions are influenced by a desire to win reelection. Their optimal reelection strategy depends on a country's electoral institutions, which are the rules governing democratic elections. The geographic distribution of economic activity determines the best means to achieve incumbents' optimal re-election strategy. Targeted economic policies, like subsidies, win votes. But the efficacy of subsidies as a vote-winning policy tool depend on a country's institutions and economic geography. As a result, subsidies for the manufacturing sector constitute a larger share of government expenditures in plurality systems than in proportional systems when manufacturing employment is geographically concentrated. When manufacturing employment is geographically diffuse, governments in proportional systems assign relatively more of their budgets to manufacturing subsidies than governments in plurality systems, holding all else equal. This finding suggests economic geography can help to solve the debate over which democratic institutions generate the most particularistic economic policies. My argument also identifies the conditions under which governments are most likely to violate international economic agreements.
  Print publication: 19 April 2018, pp 216-235
  8 - Conclusion and Implications
  Print publication: 19 April 2018, pp 199-215
  My argument suggests a solution to the debate over which democratic institutions make politicians most responsive to special interests: economic geography. My findings further suggest the widespread use of the plurality/proportionality dichotomy obscures an important mechanism linking electoral institutions to policy: the nature of electoral competition. Further confusion about the policy effects of electoral institutions stem from poor measures of particularistic economic policy. I demonstrate a novel way to classify government programs by estimating the geographic distribution of potential beneficiaries using entropy indices. My argument also adds an important element to neo-institutional theories in political science by demonstrating that it matters not only what voters want from government but also where they are located. The logic of my argument is general and can be applied to issues where voters with shared preferences exhibit varied geographic patterns. One example may be ethnic politics. My argument also has important implications for international politics, as discussed in this chapter. My argument suggests which countries are most likely to violate international economic agreements, which countries are most likely to impede future economic integration and which countries are most likely to demand reforms to existing international agreements.
  Print publication: 19 April 2018, pp x-xii
  2 - The Uneven Geographic Dispersion of Economic Activity
  Print publication: 19 April 2018, pp 27-38
  One of the most striking features of modern economies is the uneven distribution of economic activity. Activities, such as production and employment, are unevenly distributed across space. Measuring geographic patterns of economic activities is difficult because doing so requires large amounts of disaggregate data. Information is needed about where individuals work and what sector they are employed in and this information must be available for highly disaggregated geographic units, such as local labor markets. Given these data requirements, many previous measures of economic geography fall short of capturing the theoretical concept of interest and most are available for only a single country. To address these limitations, I generate a continuous empirical measure of the geographic dispersion of sector-specific employment in more than ten countries using entropy indices. Measuring geographic concentration is an important first step to investigate how economic geography influences politics and policy in countries with various political institutions. I leave until Chapter 4 the technical details about the construction of the measure of economic geography. In this chapter, I explore the concept of economic geography: what it is, why does it vary, and how might it matter for politics?
  6 - Why Institutional Differences among Proportional Representation Systems Matter
  Print publication: 19 April 2018, pp 134-169
  In proportional systems, governments spend relatively more on subsidies when the beneficiaries are geographically diffuse. Among proportional systems, spending on subsidies for diffuse groups is higher in closed list systems, where voters select a party at the ballot box, as compared to open list systems where voters to select individual candidates from a party's list. In open list systems, legislators have incentives to divert resources away from geographically diffuse groups towards their own electoral district or bailiwick. By doing so, legislators cultivate their own personal support base, which increases their reelection chances in open list systems. Given this, open list systems incentivize the provision of economic benefits to geographically concentrated groups. These incentives grow stronger as district magnitude increases and politicians compete against more co-partisans for voters' support. Consequently, among PR systems, the most generous subsidies occur in open-list systems with high mean district magnitude and geographically concentrated groups. These findings demonstrate that the nature of electoral competition is an important mechanism linking electoral systems and economic geography to policy outcomes.
  7 - The Policy Effects of Electoral Competitiveness in Closed-List PR
  Print publication: 19 April 2018, pp 170-198
  I investigate how government-funded subsidies vary between electoral districts within an archetypal proportional system: Norway. Political parties competing in this closed-list proportional system, where voters select a party at the ballot box rather than an individual candidate, engage in policy targeting – that is, parties provide economic benefits selectively to geographically-defined groups. Political parties target economic benefits to those districts where they have relatively more supporters. Districts where the largest government party won a greater share of the vote in the previous election receive more generous subsidies, all else equal. I report qualitative evidence from interviews of government ministers and bureaucrats responsible for the administration of subsidy programs. These interviews confirm the importance of electoral politics and economic geography for governments' spending decisions and illustrate the mechanisms governments use to target subsidies. The government directly controls the allocation of subsidies to sectors via the budget process. The government indirectly controls the allocation of subsidies to firms within a sector via control of the bureaucracy. To control bureaucratic decisions over firm-level subsidies, the government uses letters of assignment and biannual meetings.
  Print publication: 19 April 2018, pp 236-248
  Print publication: 19 April 2018, pp viii-viii
  4 - Explaining Government Spending on Industrial Subsidies
  Print publication: 19 April 2018, pp 64-96
  Electoral institutions, which determine the manner in which citizens choose their representatives, and economic geography, which refers to the distribution of economic activities across space, together help to explain the variation in subsidy spending between democracies. Economic geography is measured here using disaggregated employment data that identify employees' geographic location as well as their sector of employment. These data reveal that real world employment patterns rarely conform to the assumptions adopted in theoretical models of economic policy making. Relaxing these assumptions reveals new predictions about the policy effects of electoral institutions and novel quantitative evidence supports these predictions. Subsidies for the manufacturing sector constitute a larger share of government expenditures in plurality systems than in proportional systems when manufacturing employment is geographically concentrated. When manufacturing employment is geographically diffuse, governments in proportional systems assign relatively more of their budgets to manufacturing subsidies than governments in plurality systems, holding all else equal. This finding suggests economic geography can help to solve the debate over which electoral institutions generate the most particularistic economic policies.
  5 - The Power of Producers
  Print publication: 19 April 2018, pp 97-133
  The mechanisms linking electoral institutions and economic geography to policy outcomes are examined via two cases: a subsidy program to support Cognac producers in France and a subsidy for Austrian wine makers. The two programs exhibit different characteristics largely because of the respective countries' electoral institutions and economic geography. In France, where Cognac producers are geographically concentrated and legislators are elected via a majority-plurality electoral system, the subsidy is selectively targeted to only those producers in the Cognac designated region. In contrast, the Austrian subsidy is available to all farm-gate wine merchants regardless of their geographic location. Farm-gate wine merchants, who sell wine at the place of production, are spread across more than forty-five thousand hectares in Austria. Subsidizing this geographically diffuse group is politically expedient for parties competing in elections held via proportional rules and closed-party lists, as in Austria. Both subsidy programs violated the European Union rules on State Aid, which limit member-states' ability to assist domestic producers. Yet despite EU State Aid rules, some governments choose to subsidize domestic producers. Novel evidence shows that countries' electoral institutions and economic geography predict the likelihood of governments' compliance with EU state aid rules.
  3 - How Institutions and Geography Work Together to Shape Policy
  Print publication: 19 April 2018, pp 39-63
  Institutions and geography together shape economic policies. Policy outcomes are decided by incumbent politicians whose decisions are influenced by a desire to win reelection. Particularistic economic policies, like subsidies, will sometimes be an efficient means by which to win reelection. Subsidizing geographically diffuse groups helps political parties win votes across the country. Such diffuse electoral support is valuable to parties competing in proportional electoral systems with multiple districts because it maximizes the number of seats they hold in parliament. While ocusing exclusively on geographically concentrated groups may increase a party's vote share in a given district, it limits the party's national appeal. Leaders in proportional electoral systems are therefore less responsive to the demands of geographically concentrated groups, as compared to diffuse groups. In this chapter, I discuss the mechanisms through which economic geography and electoral institutions work to shape leaders' policy incentives, notably effective vote maximization and the nature of electoral competition. I also discuss possible alternative mechanisms including government partisanship, factor mobility, party discipline, and electoral competitiveness.