heeding to the losers from trade. evidence from
TRANSCRIPT
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Heeding to the Losers from Trade.Evidence from Legislators’ Trade PolicyPreferences and Legislative Behavior
M. Victoria Murillo† Pablo M. Pinto‡
†ColumbiaUniversity
‡University of Houston
2015 Meeting of the IPESStanford UniversityNovember 13, 2015
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TRADE POLITICS:PREFERENCES AND OUTCOMES
PE scholars have made important contributions tounderstanding individual (and firm) trade policypreferences
But, it is hard to explain trade policy solely on preferencesdrawn from surveys
1. Low prevalence across broad segments of the population2. Multidimensionality of trade policy3. Trade policy is seldom enacted by direct vote or plebiscite
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OUR CONTRIBUTION:LOOK AT SUPPLY SIDE OF TRADE POLITICS
Focus on legislators’ preferences and behavior:
High prevalence:Legislators identify benefits of trade, its direct and indirectconsequences, and the consequences of protectionismLegislators are more sophisticated and informed, givencentral position in political system
Dimensionality of trade policy
Identify gains and losses across multiple policy dimensions(prices, employment, inflation and competition)Political discourse and votes on policy instruments chosen toaddress multiple concerns
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BACKGROUND:TAXING AGRICULTURAL EXPORTS IN ARGENTINA
High salience of trade in 2007-2008 ArgentinaSoybean has become main Argentine export commodity
Consumers face negative consequences of expansion ofsoy production and higher international prices
Soybean production displaces food production (wheat,maize, livestock)Agricultural exports pushes food prices up
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BACKGROUND II:TAXING AGRICULTURAL EXPORTS IN ARGENTINA
C. F. Kirchner’s government raised export tax rates onagricultural products in March 2008
Argued that restricting agricultural exports helps curb foodinflationTaxes on soybean and other agricultural exports are sourceof fiscal revenue
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BACKGROUND III:AGRICULTURAL REBELLION OF 2008
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BACKGROUND IV:AGRICULTURAL REBELLION OF 2008
Agricultural rebellion ⇒ lockout and road blockagesIn response to protest President CFK sent Bill to Congressto ratify export tax hikeProtest raised salience of Export Tax Bill:
Bill barely passed the Lower Chamber: 129 Yea, 122 Nay, 2abstentionsNumerous defections from government coalitionBill eventually killed by tie-breaking vote of Vice-Presidentin the Senate
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LEGISLATORS AND TRADE POLICY
Analyze how legislators respond to institutional incentives
In large districts, comprising industrial and agriculturalactivities, legislators face cross-cutting pressure:
Represent local constituency’s trade policy preferencesFollow party line
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EMPIRICAL STRATEGY
Roll call analysis of vote on Ratification of Res. 125/08(Agricultural Export Tax Bill)
Analysis of Legislators’ Responses to original surveyexperiment
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INCENTIVES TO VOTE ON EXPORT TAX BILL
1. Party discipline: given closed-list PR and strong partydiscipline:
Members of the FPV (ruling) caucus vote for export taxMembers of the opposition vote against export tax
2. Material concerns: given impact of export taxes oneconomic activity in local district
Probability of voting against export tax decreases with soyproduction in local districtProbability of voting for export increases with tax transfersto local district
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FIGURE 2: SOY PRODUCTION AND VOTE BY CAUCUS
List of Defectors
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FIGURE 3: PROB. OF VOTING FOR RES. 125/2008
Table 1
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SURVEY EXPERIMENT
Received Wisdom: Given high education and strong priorslegislators should be:
Supportive of trade, irrespective of geography andlegislator’s leaningsNot malleable to framing effects
But we observe sizable framing effects . . .
Survey Design
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FRAMING EFFECTS BY REGION
Legislators’ Responses Voters’ Responses
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ANALYSIS OF SURVEY EXPERIMENT
LEGISLATORS’ MALLEABILITY TO FRAMING EFFECTS
Dimensionality:Legislators are sensitive to differential effects of trade onincome, employment and prices
Sensitivity to losers from trade:Expected direct and indirect losses from trade for localconstituents
All legislators affected by price concernsLegislators representing import competing regions moresensitive to employment effects
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FIGURE 7: PROBABILITY OF RESPONDING “STRONGLY
AGREE” BY FRAME AND REGION
Note: Predicted probabilities and 90% confidence intervals of responding “Strongly Agree” derived from Model 1 inTable 2. * and ** denote statistically significant differences at the 10% and 5% levels, respectively.
Table 2
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CONCLUSION
Roll call analysis of vote on Export Tax BillParty discipline: FPV legislators more likely to vote to ratifyResolution 125/08Material Concerns: Defections systematically associatedwith expected losses in soybean producing areas wherelegislator resides
Survey Experiment Findings:Dimensionality of Trade: Framing effects despite educationand priorsMaterial Concerns: Effect stronger for experimentalconditions highlighting expects of trade on losers in importcompeting areas
Heeding to the losers: Bring material concerns back intotrade politics
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THANK YOU!
Heeding to the Losers from Trade.Evidence from Legislators’ Trade PolicyPreferences and Legislative Behavior
M. Victoria Murillo† Pablo M. Pinto‡
†ColumbiaUniversity
‡University of Houston
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TRADE POLITICS
“BRINGING MATERIAL CONCERNS BACK IN”
Recent empirical studies downplay the role of economicself-interest on trade policy preference formation(O’Rourke and Sinnott 2001; Mayda and Rodrik 2005;Hiscox 2006; Hainmueller and Hiscox 2006)Growing consensus: Individual preferences towardsglobalization driven by cultural/ideological concerns andpsychological disposition (Hermann, Tetlock, and Diascro2001; Mansfield and Mutz 2009; Margalit 2012)However, there is a weak mapping from individualpreferences onto policy outcomes
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TABLE 1: PROBABILITY OF VOTING FOR THE EXPORT TRADE TAX BILL (PROBIT REGRESSION)
(1) (2) (3) (4) (5) Allied 2.864*** 2.790*** 2.921*** 1.676* (0.543) (0.596) (0.565) (0.859) Radical K 2.911*** 2.630*** 2.989*** 1.179*** (0.497) (0.500) (0.518) (0.432) FPV (a) 3.652*** 3.565*** 3.861*** 2.390*** 2.414*** (0.421) (0.412) (0.441) (0.220) (0.285) Soy Production -3.241** -3.437** -3.036*** -1.948 (1.348) (1.353) (1.143) (1.559) FPV x Soy prod. -1.927 (2.037) Import Competing Region 0.671* 0.730* 0.079 0.116 (0.388) (0.380) (0.235) (0.242) Public employment 0.010* 0.004 0.005 0.001 0.007 (0.005) (0.005) (0.005) (0.005) (0.005) District Magnitude 0.001 0.010* 0.003 -0.000 0.006 (0.006) (0.005) (0.006) (0.005) (0.005) Constant -3.264*** -2.618*** -2.959*** -0.955** -1.432*** (0.537) (0.567) (0.568) (0.372) (0.378) Party Caucus Caucus Caucus List Caucus pseudo R2 0.593 0.598 0.608 0.458 0.447 N 257 257 257 257 257 * p<0.10 ** p<0.05 *** p<0.01; robust standard errors in parentheses Notes: Dependent Variable = 1 if vote for Res. 125 = Yes, 0 otherwise.
(a) FPV = Pro-government (FPV, Allies and Radical K) in Model (5)
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Return
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TABLE 2: PROBABILITY OF LEGISLATORS’ SUPPORT FOR TRADE (ORDERED PROBIT REGRESSION)
(1) (2) (3) (4) Import Competing Region -0.267 -0.318 -0.385 -0.384
(0.430) (0.446) (0.490) (0.491)
Employment/Production frame -0.626* -0.589* -0.586* -0.586*
(0.327) (0.329) (0.332) (0.332)
M-comp x Production frame -0.266 -0.278 -0.293 -0.290
(0.538) (0.534) (0.535) (0.532)
Price frame -0.725** -0.708** -0.717** -0.720**
(0.323) (0.324) (0.322) (0.323)
M-comp x Price frame 0.248 0.252 0.244 0.250
(0.542) (0.550) (0.549) (0.543)
FPV Legislator -0.237 -0.239 -0.269
(0.211) (0.214) (0.289)
College or more 0.073 0.081 0.083
(0.220) (0.218) (0.217)
District Magnitude
0.002 0.002
(0.004) (0.004)
Soy production
-0.162 -0.123
(1.503) (1.583)
Vote for Export Taxes (Res. 125)
0.039
(0.293)
Cutpoints (κi) κ1 -2.976*** -3.047*** -3.027*** -3.020***
(0.373) (0.378) (0.378) (0.378)
κ2 -2.708*** -2.771*** -2.749*** -2.742***
(0.318) (0.354) (0.365) (0.369)
κ3 -2.612*** -2.672*** -2.650*** -2.644***
(0.306) (0.368) (0.382) (0.387)
κ4 -2.529*** -2.588*** -2.566*** -2.559***
(0.293) (0.358) (0.371) (0.378)
κ5 -1.368*** -1.419*** -1.397*** -1.391***
(0.256) (0.347) (0.370) (0.377)
pseudo-R2 0.048 0.054 0.054 0.055 N 200 200 200 200 * p<0.10 ** p<0.05 *** p<0.01; robust standard errors in parentheses. DV: Support for increasing trade = No response (0), strongly disagree (1), disagree (2), indifferent (3), agree (4), strongly agree (5) ! Return
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APPENDIX 1: PRO-GOVERNMENT DEFECTORS
Return
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THE COST OF DEFECTIONS
FDP Legislators who voted against the party line:5 legislators elected on a non-FPV Peronist List14 legislators left Congress, of which 7 pursued localpolitical careers
8 Radicales-K (allied to FPV) who voted against:All left FPV coalition; 3 re-elected on opposition list; 2 lostre-election on opposition list; 1 elected to Senate; 2returned to local political positions
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IDEOLOGY BY EXPORT TAX VOTE
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IDEOLOGY BY PARTY
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SURVEY EXPERIMENT DESIGN
1. Price frame (63 legislators): “Hay quienes creen que aumentar el
comercio con otras naciones genera empleo y permite adquirir productos y
servicios mas baratos.” [”Many people believe that increasing trade with other
nations creates jobs and allows consumers to buy goods and services at lower
prices.”]
2. Production frame (65 legislators): “Hay quienes creen que
aumentar el comercio con otras naciones provoca desempleo y perjudica a los
productores argentinos.” [“Many people believe that increasing trade with other
nations creates unemployment and hurts Argentine producers.”]
3. Control (72 legislators): No introductionQuestion: Support for increasing trade“Ud. esta de acuerdo o en desacuerdo con que Argentina incremente su
comercio con otras naciones?” [“Do you agree or disagree with Argentina
increasing its trade with other nations?”]
Return
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FIGURE 4: DISTRIBUTION OF PREFERENCES FOR
TRADE BY FRAME
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FIGURE 5: DISTRIBUTION OF PREFERENCES FOR
TRADE BY FRAME AND CAUCUS
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FIGURE 6: DISTRIBUTION OF PREFERENCES FOR
TRADE BY FRAME AND REGION
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FIGURE A2.1: LEGISLATORS’ PREFERENCES FOR
TRADE BY FRAME AND EDUCATION
Return
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PREFERENCES FOR TRADE BY FRAME AND
EDUCATION (VOTERS)
Return
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FIGURE 1. FRAMING EFFECTS BY EDUCATION AND
REGION (PUBLIC OPINION SURVEY)
Ardanaz, Murillo and Pinto (IO 2013)
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FIGURE 2. FRAMING EFFECTS BY SKILL AND REGION
(PUBLIC OPINION SURVEY)
Ardanaz, Murillo and Pinto (IO 2013)