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Globalisation's discontents

Geoff Riley

25th August 2016

New survey evidence that the low skilled in rich countries and the high skilled in poor countries have most negative attitudes to multinationals

Whether you are for or against globalisation depends on your economic status – but the effects are determined both by who you are and where you live. That is the central finding of research by Philipp Harms and Jakob Schwab, presented at the annual congress of the European Economic Association in Geneva in August 2016. Their study analyses survey data on attitudes to multinational firms from roughly 25,000 individuals across 32 industrialised, emerging and developing economies.

The results show that those who are more likely to benefit from the presence of multinationals – skilled, well-educated, younger and richer people – are also more likely to exhibit a positive attitude towards them.

But this effect isn’t universal: on one hand, the average attitude depends on where you live – with twice as many people expressing negativity in France as in Sweden – and people living in corrupt or very unequal economies are more likely to reject globalisation. What’s more, in poor countries, low-skilled workers are more likely to welcome multinational enterprises, the opposite of the effect in rich countries.

The authors comment: ‘Our results suggest that opposition to economic globalisation need not necessarily be irrational. To ensure public support for international economic integration, policy-makers would be well advised to make sure that those who are adversely affected at the individual level also participate in the aggregate gains.‘

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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