The Impact of Ingroup Favoritism on Trade Preferences

Abstract

Using a population-based survey experiment, this study evaluates the role of ingroup favoritism in influencing American attitudes toward international trade. By systematically altering which countries gain or lose from a given trade policy (Americans and/or people in trading partner countries), we vary the role that ingroup favoritism should play in influencing preferences. Our results provide evidence of two distinct forms of ingroup favoritism. The first, and least surprising, is that Americans value the well-being of other Americans more than that of people outside their own country. Rather than maximize total gains, Americans choose policies that maximize ingroup well-being. Moreover, this tendency is exacerbated by a sense of national superiority; Americans favor their national ingroup to a greater extent if they perceive Americans to be more deserving. Second, high levels of perceived intergroup competition lead some Americans to prefer trade policies that benefit the ingroup and hurt the outgroup, over policies that help both their own country and the trading partner country. In order for a policy to elicit support, it is important not only that the U.S. benefit, but also that the trading partner country lose so that the U.S. achieves a greater relative advantage. We discuss the implications of these findings for understanding bipartisan public opposition to trade.

Keywords: in-group favoritism, ethnocentrism, trade, public opinion