Economic Globalization and Turnout: Compensation, Constraint and Ownership

Abstract

This paper considers the direct and indirect effects of economic globalization on turnout in OECD countries since the 1970s. We find evidence at the individual and aggregate levels for a constraint mechanism whereby globalization reduces turnout as voters become indifferent between parties and less efficacious. Contrary to the compensation hypothesis proposing that citizens receive compensation for the costs of globalization in the form of public services, we find spending decreases with globalization, and this in turn reduces the incentive for voters to turn out. We also observe that while measures of the globalization of ownership (such as foreign direct investment) affect turnout, there is less evidence for an effect operating through international trade at the aggregate level. We suggest that this is because the interdependence of economies through patterns of cross-national ownership may be more constraining on government policy than high levels of international trade.