Working Papers

Jamal, Amaney, and Helen V. Milner. Working Papers. “Do Economic Interests Transcend Socio-Cultural Values? Understanding Support for Globalization in MENA”.Abstract

What factors shape attitudes toward economic globalization? Theories in international and comparative political economy emphasize the importance of economic variables, like factor endowments, as determining preferences toward international trade. Other literature emphasizes the importance of non-economic factors, including nationalism and socio-cultural variables as crucial. This paper attempts to adjudicate between these two competing arguments by focusing on the factors correlated with public support for Foreign Direct Investment in Tunisia. On the one hand, Tunisia might benefit from economic globalization and those who stand to benefit might champion further globalization. On the other hand, globalization might conflict with some of its core socio-cultural values linked to Islam, patriarchy, and nationalism. In this paper, we adjudicate between these competing arguments by analyzing data and results from three original data sources conducted in 2015 and 2016. The first is a large representative survey (N=4986) of Tunisian citizens. The second is a conjoint survey experiment (N=1502), and the third is an original survey experiment with different social vignettes (N=504).

de la Cuesta, Brandon, et al. Working Papers. “Do Indirect Taxes Promote Accountability? Testing The Effects of Revenue Modality on Citizen Behavior”.Abstract

Governments that rely on taxation, rather than non-earned revenues such as aid or oil, are believed to attain better outcomes across a range of governance measures. Yet this positive tax effect may fail to result from all forms of taxes. In particular, indirect taxes such as VAT or sales tax are less visible than direct taxes and, further, indirect taxes may not “bite” like direct taxes because individuals typically receive a valued good at the moment of paying them. Thus, the accountability gains from taxation may hold more strongly for direct than indirect taxes. Yet we lack compelling evidence regarding differential effects of tax mode and on the mechanisms through which different forms might operate. To fill this lacuna, we first report lab-in-the-field experiments, conducted in Uganda, showing that less visible indirect taxes have smaller effects on citizens’ accountability demands. We then describe survey experiments from Uganda demonstrating that indirect taxes are typically not visible to consumers when purchasing. Finally, cross-national data indicate that, while direct taxes are associated with lower corruption, indirect taxes are not.

Milner, Helen V. Working Papers. “Globalization and its Political Consequences:The Effects on Party Politics in the West”.Abstract

Globalization has grown much since 1980s. What political trends have been associated with this growth? This paper examines two aspects of the political consequences of globalization. Economic globalization, according to some economic theories, has adverse consequences for labor, especially less skilled labor, in the rich democracies. If these voters are the median, then we might expect parties to respond to this by turning against globalization and the openness to flows of goods, services, people and capital that it brings. Have parties turned against economic openness? And have parties, especially extreme right-wing ones, that oppose openness advanced in terms of their electoral strength as a result? Furthermore, have these pressures from globalization been mitigated by social welfare policies, as earlier research claimed? First, updating and extending the research of Burgoon (2009), I ask whether political parties in the advanced industrial countries have adopted more anti-internationalist platforms as globalization has advanced. Second, I examine whether parties have been aected deferentially by globalization; in particular, have extreme, right-wing populist parties gained vote share as globalization has proceeded, while mainstream left ones have lost. The evidence suggests that globalization, especially trade, is associated with a political turn to anti-internationalism and to extremist parties.

de la Cuesta, Brandon, et al. Working Papers. “On Government Revenues, Accountability, and NGOs: Experimental Evidence from Ghana and Uganda on Taxes, Oil, and Aid”.Abstract

Do citizens more readily demand  accountability from governments for taxes than for non-tax revenue from oil or aid? Identical experiments on large, representative samples of Ghanaians and Ugandans probe the effects of different revenue types on citizens' actions to monitor government spending. A similar experiment on MPs from the two countries examined their beliefs about these revenue sources. Roughly half of all citizens willingly take action to scrutinize all three sources. Neither Ghanaians nor Ugandans are more likely to take action for tax revenues than oil or aid when the money goes to the government. MPs  likewise saw no difference. Citizens do differentiate  between revenue delivered to the government compared to money given to NGOs. Findings are robust to numerous alternatives  and subgroups. Little evidence exists that taxes strengthen citizens' demands for accountability or that MPs perceive differences across revenue sources. However, aid channeled through NGOs motivates more accountability.

Milner, Helen V., and Bumba Mukherjee. Working Papers. “Democracy and Trade Policy in Developing Countries: Particularism and Domestic Politics with a Case Study of India”.Abstract

What explains the variation in trade policy among democracies in developing countries? Why have some liberalized trade more than others? We analyze the impact of political particularism – defined as the degree of party discipline and the incentives for politicians to cultivate a personal vote – on trade protection. We present theoretical results from a model of particularism and its effects on tariffs; we present quantitative evidence to test the model; and then we develop a case study of India to illuminate it. Our model analyzes how an increase in particularism (that is, a shift from a party-centered to a more candidate-centered system) interacts with the degree of inter-industry occupational mobility of labor and the asset-specificity of industries to influence trade policies in developing democracies. Our model suggests that an increase in particularism induces leaders from the ruling and opposition parties to shift trade policy in equilibrium to the median voter's optimal preference, who in a developing society is a worker; and this means a reduction in trade barriers when labor mobility is high. Our data strongly support this conclusion. Our case study of India shows how the dynamics of a party-centered system operate to maintain higher trade barriers.

Milner, Helen V., and Bumba Mukherjee. Working Papers. “Democracy, Globalization and the Skill-Bias in Trade Policy in Developing Countries”.Abstract

Existing research suggests that democracy fosters economic globalization by promoting trade liberalization in the developing world. We argue that democracy in developing countries generates a “skill bias” in trade protection where democratic incumbents have incentives to increase tariffs on high skilled goods but reduce trade barriers on low skilled goods. Our model analyzes how electoral competition and interest group politics in the Heckscher-Ohlin economy of a democratic developing country affects trade protection on low and high skilled goods. It predicts that electoral competition induces the government to reduce trade barriers for low skilled goods to appeal to the abundant factor, namely the low skilled median voter, who optimally prefers a reduction in tariffs for low skilled goods. Yet electoral politics also engenders lobbying pressure and campaign contributions from the scarce factor in the polity – the owners of skill-intensive industries (the interest group) – who prefers more trade protection for high skilled goods. The government rationally responds to these contributions by protecting skill-intensive industries from import competition. Empirical tests conducted on a disaggregated industry-level dataset of trade protection supports our theoretical predictions.

Jamal, Amaney, and Helen V. Milner. Working Papers. “Economic and Cultural Sources of Preferences for Globalization in Egypt ”. SSRN VersionAbstract

What factors shape attitudes toward economic globalization? Theories in international and comparative political economy emphasize the importance of economic variables, like factor endowments, as determining preferences toward international trade. Other literature emphasizes the importance of non‐economic factors, including nationalism and cultural values, like tolerance, that might explain citizens’ predispositions toward globalization. This paper attempts to adjudicate between these two competing arguments by focusing on the factors correlated with public support for increasing trade in Egypt. On the one hand, Egypt might benefit from economic globalization. On the other, it has a rich and deep socio‐political history of Western colonialism, political Islam, and radicalism. This history might serve as the lens through which the potential benefits of globalization are assessed. In this paper, we investigate these questions, using data from the Pew Global Attitudes 2010 survey of Egyptians. We find that both economic and cultural factors matter, but that cultural ones may be even more influential in this particular developing country setting.

Milner, Helen V, and Sondre U. Solstad. Working Papers. “Technological Change and the International System”.Abstract
Does world politics affect the adoption of new technology? States overwhelmingly rely on technology invented abroad, and their differential intensity of technology use accounts for much of their differences in economic development. Much of the literature on technology adoption focuses on domestic conditions. We argue that the structure of the international system is critical. It affects the level of competition among states which in turn affects leaders’ willingness to enact policies that speed technology adoption. Countries adopt new technology as they seek to avoid vulnerability to attack or coercion by other countries. We examine this systematically by considering states’ adoption of technology over the past 200 years. We find that countries adopted new technologies faster when the international system was less concentrated, that systemic change Granger-caused technology adoption, and that policies to promote technology adoption were related to concerns about rising international competition. A competitive international system is an important incentive for technological change, and may underlie global “technology waves”.
Milner, Helen V., and Dustin Tingley. Working Papers. “The Economic and Political Influences of Different Dimensions of United States Immigration Policy”.Abstract

Recent research on political attitudes towards immigration often pits arguments emphasizing economic self-interest against ideological or cultural explanations. Many of these studies conceptualize immigration policy along a single dimension instead of disaggregating it into its distinct policy dimensions. Conditional on the type of immigration policy, different explanations should have more or less explanatory power. We disaggregate immigration policy into six different dimensions and provide theoretical scope conditions for when ideological and economic factors should matter. We test these predictions on votes on immigration policy in the US House of Representatives from 1979-2006. We advance the debate on the determinants of immigration policy by showing that both economic self-interest and ideological explanations can be powerful, depending upon the type of immigration policy under consideration.

Milner, Helen V. Working Papers. “The Global Spread of the Internet: The Role of International Diffusion Pressures in Technology Adoption”.Abstract

What factors have promoted and retarded the spread of the internet globally? Much as other technologies, the internet has diffused unevenly across countries. The main proposition is that its spread is neither purely economic nor entirely domestic. International diffusion pressures exert a powerful influence. The adoption of new technology depends on domestic policy, and this in turn depends on the choices that political leaders make about rules governing new technologies. I examine the impact of international diffusion pressures on political leaders, testing the role of five types of such pressures. The distribution of capabilities globally may shape the spread of the internet, as dominant power(s) may directly or indirectly coerce others into adopting. Patterns of adoption may also be shaped by competitive pressures from the world market. Technological change especially may depend on network externalities, involving the number of adopters already in existence. Learning from other countries or from participating in international organizations may stimulate adoption. Finally, countries may simply copy the policies and hence the adoption patterns of other countries with whom they share sociological similarities. Data from about 190 countries since 1990 shows that diffusion pressures matter, even when controlling for domestic factors. Economic competition and sociological emulation play consistently important roles in affecting the spread of the internet.

Büthe, Tim, and Helen V. Milner. Working Papers. “The Interaction of International and Domestic Institutions: Preferential Trade Agreements, Democracy, and Foreign Direct Investment”. Stable URLAbstract

Foreign direct investment (FDI) has come to be seen as a promising avenue for boosting economic development. As a consequence, most developing countries now seek to attract FDI, often by making ex ante promises to foreign investors not to pass laws or regulations — or refrain from other actions — that would diminish the value of the investment ex post. But how credible are such promises? A number of recent studies have examined the effect of domestic institutions (veto players, democracy, etc.) on the credibility of commitments by developing country governments toward foreign private economic actors, such as foreign investors. In addition, a few studies have examined the effect of international institutions on the credibility of such commitments. We examine the interaction of domestic and international institutions in promoting FDI. We show theoretically and empirically that democratic domestic institutions help attract more FDI into developing countries only in the context of economically liberal international institutions.