Theme: Globalisation has become a controversial subject that raises great suspicion. This ARI, based on the European Commission’s Eurobarometer of late 2003, addresses the question of who fears globalisation and why.
Summary: The perception of globalisation as either a threat to employment or an opportunity is what explains individual attitudes to the phenomenon. Manual workers are those who most oppose this process, followed by employed people in general. By age, people of working age are those who are most hesitant to accept globalisation. It is interesting to observe that retiring from the labour market increases support for globalisation. In short, labour insecurity is the key factor in resistance to globalisation. Other social factors –such as gender, region of residence or certain idiosyncrasies– play a very limited role, as do political factors –such as concern for the consequences of globalisation on public services or the perception that the profits of globalisation go to the multinationals and to the United States–. By determining that labour-related factors are the reason why a sector of the population is suspicious of globalisation, it will be easier to decide how to increase support for this process.
In his book In Defense of Globalisation (Oxford University Press, New York, 2004) Jagdish Bhagwati begins the first chapter (‘Anti-Globalisation: Why?’) by affirming that globalisation has become a phenomenon condemned to endless debate –one that is the target of passionate hostility and sometimes violent protest–.Globalisation brings additional positive economic effects, but the distribution of these benefits produces winners and losers. This is why the process arouses suspicion among those who think that they may be harmed by it, and support among those who believe they will benefit from it. Individual consequences are not the only ones that contribute to forming an opinion on globalisation. Other social and demographic factors also come to bear on support for the process.
In this paper we set out to determine which factors underlie the fear of globalisation in the EU, and the relative importance of each one. To do so, we have used the Flash Eurobarometer 151b, carried out by Gallup-Europe for the European Commission. After defining globalisation as the general opening up of all economies and the creation of a truly integrated world-wide market, the survey asks European citizens: ‘Are you personally totally in favour, rather in favour, rather opposed or totally opposed to the development of globalisation?’. Our analysis of globalisation therefore leaves aside its implications for immigration and focuses exclusively on its economic aspects.
Factors Determining Support for Globalisation
In our study we use the variables considered by the literature on economic policy to be relevant to support for globalisation. Individuals assess globalisation on the basis of how they believe it will affect them. Individual preferences on trade policy depend essentially on the mobility of workers from one sector to another. When workers cannot easily change sector, for example in the Ricardo-Viner model, their biases regarding economic integration policy depend on the sector in which they are employed. Workers in sectors with relative comparative advantages tend to support free trade since it increases exports and raises wages in the sectors in which they are specialised. By contrast, workers in sectors with comparative disadvantages tend to oppose opening up, because their sectors are affected by increased foreign imports, which results in lower wages and job losses.
On the other hand, if the factors are able to move freely among sectors, as occurs in the Heckscher-Ohlin model, then workers’ skills become the key variable in their support for globalisation. In this model, economic integration increases the profitability of factors of production that are abundant in relative terms in a given region, while reducing it for factors that are relatively scarce. As a result, factors of production that are abundant tend to be in favour of free trade, while those that are scarce are opposed to it. Since the EU is a region relatively rich in human capital in comparison with the rest of the world, globalisation will stimulate an increase in relative demand for highly skilled workers, thereby raising their wages. Therefore, highly skilled European workers will be in favour of globalisation, while relatively unskilled workers will be opposed to it. The type of training can also be an important factor in attitudes towards globalisation. If they lose their job, workers with specific training have more to fear than those with general training, since the former may have to change to sectors that demand training very different to theirs.
However, individual interests do not entirely explain support for globalisation. Considerations relating to ideology and socio-demographics can also play a relevant role. Some analysts suggest that in Sweden’s referendum on accession to the EU, voters were very conscious of the repercussions of an open economy on the maintenance of the welfare state. Several studies also show that women have a more protectionist attitude than men, which may be because the labour market is segmented in such a way that women face greater risks from free trade. Finally, social factors can contribute to the fact that support for globalisation is lower in rural areas than in other regions.
The Flash Eurobarometer 151b
The European Commission has been carrying out Eurobarometer surveys since 1973. The one analysed here was done on 8-16 October 2003, in the 15 member states that then made up the Union. The Flash Eurobarometer 151b is made up of a sample of 7,515 citizens who responded to telephone interviews in all 15 EU countries. There were similar numbers of respondents in each country: Portugal had the least (403), while Greece had the most (491). The survey asked: ‘Are you personally totally in favour, rather in favour, rather opposed or totally opposed to the development of globalisation?’. This is how support for globalisation will be measured in this chapter.
Most Europeans are in favour of globalisation: 14.5% are totally in favour, 47.9% are rather in favour, 20.4% are rather opposed, 8.0% are totally opposed and 9.2% did not know or did not answer. The variable of support for globalisation has been codified in such a way that individuals who are totally in favour are assigned a 4, while those who are rather in favour are assigned a 3, those who are rather opposed a 2, and a 1 is assigned to those who are totally opposed. The analysis excludes those who did not know or did not answer. Table 1 shows a summary of support for globalisation in each country and for the EU as a whole. The EU average is 2.76, indicating that European citizens tend to be in favour of globalisation. The people of Ireland, Luxembourg, the Netherlands and Portugal are significantly more in favour than the European average. By contrast, people in Greece, Spain, France and Austria are significantly more suspicious of the process. Also, in Germany and Finland there is significantly less dispersion of opinion on the subject of globalisation than in the EU as a whole, while the contrary is true in Greece, Sweden and the UK. A more homogenous position can be important for a country to reach a consensus on its desired degree of economic integration.
Table 1. Support for Globalisation Among EU Countries
|Country||Average||Typical deviation||Sample size|
(*), (**) and (***): the null hypothesis of equality of the mean and typical deviation of the country compared to the EU is rejected at the 10%, 5% and 1% level of significance.
The variables that will be taken into account to analyse the determinants of support for globalisation are based on the availability of information from the respondents to the Eurobarometer. Some of these are socio-demographic variables: male (MALE, a dummy that is given the value 1 for male respondents and 0 for females); age (AGE, from 15 to 93 years); area where the respondent lives (METROPOLITAN, URBAN or RURAL), current occupation (SELF-EMPLOYED, EMPLOYED, MANUAL WORKER or NOT ACTIVE –which includes the unemployed–); and educational level (EDUCATION, expressed as the age at which the respondent completed his or her professional or vocational training).
Two variables are included that reflect how respondents feel that globalisation will affect them personally. The first of these is the individual’s perception of the benefits of increasing globalisation for him/her and his or her family (BENEFITS). This variable is codified so that a 3 indicates that the individual thinks globalisation will be beneficial, a 2 means that he or she thinks it will have no effect, and 1 indicates that the respondent anticipates negative effects. Another consideration is whether respondents see globalisation as an opportunity or as a threat to employment and to companies in their countries (OPPORTUNITY). This variable is codified so that a 2 means that the individual sees globalisation as an opportunity and 1 means it is seen as a threat. While 41.2% of Europeans see globalisation as a threat to employment and to national companies, 58.8% see it as a good opportunity to create jobs and good for the economy in general.
Factors relating to the more general economic repercussions of globalisation are also included as determinants of opinion. These variables are included on the assumption that globalisation is multi-dimensional and therefore that citizens feel it has both positive and negative aspects. In fact, a majority of Europeans (56.3%) believe that globalisation is harmful to medium-size and small businesses, but at the same time a majority (69.6%) says it will benefit consumers. Therefore, an individual’s final decision as to whether or not to support globalisation is the result of an analysis of the positive and negative aspects of the process, and each aspect may have a greater or lesser influence. We will consider perceptions as to whether globalisation will have a positive impact on:economic growth (GROWTH), scientific and technological progress (SCIENCE) and the quality of public services (PUBLIC SERVICES). These variables have been codified so that a 3 indicates a belief that the effect will be rather positive, 2 means that it will have no effect and 1 indicates that it will be rather negative. Finally, a question is included which asks who will benefit from globalisation: consumers (CONSUMERS), the financial markets (FINANCIAL), the European Union, the United States, multi-national corporations (MULTI-NATIONALS), small and medium-size companies (SMEs), developing countries (DEVELOPING COUNTRIES) and farmers (FARMERS); where 4 means that they will benefit, 3 that they will tend to benefit, 2 that they will tend not to benefit and 1 that they will not benefit at all.
Who Supports Globalisation in the EU?
Table 2 shows the results of the estimate by ordered probit of the determinants of support for globalisation. This estimating method takes into account the fact that the distance between being totally in favour of globalisation and being rather in favour of it may not be the same as the distance between being rather in favour and being rather opposed. The first estimate in Table 2 considers only the socio-demographic factors. We find that the male variable is not significant, indicating that support for globalisation in the EU does not differ between the sexes. Age has a negative effect on the probability of being in favour of globalisation, while age squared has a positive impact. In other words, there is a U-shaped relationship between age and support for globalisation. In fact, age once again begins to have a positive effect on support for globalisation at 48 years. This result suggests that people who are not active are most in favour of globalisation, while those in working age favour it least. It would appear, therefore, that labour-related issues are behind some people’s opposition to globalisation.
The number of years of training does not affect support for globalisation, but being a manual worker increases suspicion of the process. This evidence fits the HO model, suggesting that worker qualification is a more important factor in attitudes to globalisation than the sector in which a worker is employed. Indeed, if the sector were more relevant, then being a manual worker would not be a significant factor in support for globalisation. Contrary to the expected results, we find that individuals who live in rural areas are more likely to be in the group that supports globalisation.
Table 2. Factors Determining Support for Globalisation (Ordered Probit)
|Variable||Model 1||Model 2||Model 3|
|H0: Country dummies||–||–||c2(14) 22.97*|
|H0: regional dummies||–||–||c2 (157) 309.63***|
t-ratio robust to heteroscedasticity in brackets.
(*), (**) and (***): < FONT>
The second estimate introduces variables that cover the different aspects of globalisation. When these variables are included, the individual’s age and area of residence lose significance. In other words, these two variables affect support for globalisation indirectly: they influence the individual’s perceptions of the benefits and his or her opinion on the many dimensions of globalisation, which in turn affects support for economic integration. It confirms that manual workers and employees are those who are least likely to agree with globalisation, meaning that self-employed people and non-active groups are those who most support market integration. As for the other variables, we find, as expected, that the individual’s perception that the intensification of the globalisation process is favourable to his or her own interests significantly increases the probability of support for globalisation. Seeing this process as an opportunity or as a threat to employment also has a significant influence in determining support for it. However, considerations other than individual interest also play a role in support for globalisation. Opinions on the effects of economic integration on public services are positively associated with whether an individual favours or opposes globalisation. This variable may be capturing certain ideological factors, since it indicates that individuals who believe that globalisation reduces the quality of public services oppose the process. Also, an individual’s perception that globalisation benefits technical and scientific progress, consumers, the EU, SMEs, developing countries and farmers increases the probability of his or her being in the group that is totally in favour of market integration. By contrast, believing that globalisation benefits multinationals or the United States reduces the probability of support for economic integration, even after individual interests are ruled out. This result confirms Bhagwati’s observation (2004) that the anti-globalisation movement is partly based on anti-corporate ideas. Opinions on the impact of globalisation on economic growth and financial markets were found to have no significant effect on the probability of being totally in favour of globalisation.
The third estimate includes idiosyncratic effects related to country and region; these reflect the institutional and historic biases shared by individuals of the same country or region. Accordingly, 14 country dummies were included in all but the first country (Belgium), as well as 157 regional dummies –one for each region, except for the first one in each country in order to avoid perfect multicolineality–. Regression 3 in Table 2 confirms that the regional dummies are jointly significant to 5%. By contrast, only two of the 14 country dummies are significant –Austria (-1.0374) and Portugal (0.9164)– and they are jointly significant only to 10%. As a result, the biases and institutional factors shared by individuals at the regional level are more significant in terms of their attitude towards globalisation than factors at the country level. The coefficients found for the other variables are very similar to those in the second estimate, indicating that the results are robust to different specifications.
The Relative Importance of Socio-Demographic and Economic Factors in Support for Globalisation
In this section we analyse the relevance of each of the factors analysed in the final decision on support for globalisation. To do so, an ANOVA analysis has been carried out, the results of which are shown in Table 3. This table shows that an individual’s perception of the economic effects of globalisation on him or herself has a decisive impact on his or her final support for economic integration (55.0%). In particular, the feeling that globalisation is a threat to employment explains 44.8% of the variation in attitudes to the process. Socio-demographic factors, by contrast, have much more limited importance (6.5%). Age is the most relevant factor in this group. In the previous section we found that working-age people were more opposed to globalisation than retired people or students. This means that this variable also seems to reflect factors related to an individual’s labour status. Perceptions of the more general economic effects of globalisation had a 30.3% impact on the final decision as to whether to support or reject market integration. The most important of the factors explaining this is the perception of the benefits of globalisation for consumers. The effects of globalisation on the quality of public services also appear to affect general opinions on the process. Finally, idiosyncratic effects at the country and regional levels explain 8.2% of the variance.
Table 3. Relative Importance of Each Factor in Explaining Support for Globalisation
|Specific sociological factors||6.5||Gender||0.0|
|Specific economic factors||55.0||Benefits||10.2|
|Collective economic factors||30.3||Growth||6.0|
|Idiosyncratic factors at country or regional level||8.2||Country factors||2.9|
Conclusions: The perception of globalisation as either a threat to employment or an opportunity is what explains individual attitudes to it. Unskilled workers are those who most oppose this process, followed by employed people in general. By age, people of working age are those who are most hesitant to accept globalisation. It is interesting to observe that retiring from the labour market increases support for globalisation. In short, labour insecurity is a key factor in resistance to globalisation. Other social factors, such as gender, region of residence or certain idiosyncrasies play a very limited role, as do political factors such as concern for the consequences of globalisation on public services or the perception that the profits of globalisation go to the multinationals and to the United States. This conclusion is good news for those who support globalisation. By determining that labour-related factors are the reason why a sector of the population is suspicious of globalisation, it will be easier to decide how to increase support for this process. The suspicions raised by globalisation can be reduced by maintaining a social welfare system, in particular unemployment subsidies to compensate workers for the labour insecurity caused by this economic process. Ongoing general training of active workers to increase the possibility of their being able to change from one sector to another in the case of displacement or foreign competition would also limit the feeling of economic insecurity.
Professor of applied economics at the Universidad Complutense de Madrid. His areas of interest include tax policy, economic growth and globalisation. He has published articles in Spanish and foreign research magazines
Ferrán Martínez i Coma
Graduate in political science and administration from the Universidad Pompeu Fabra in Barcelona, he holds a doctorate in sociology from the Universidad Complutense de Madrid and a master’s degree in social sciences from the Centre for Advanced Studies in Social Sciences at the Instituto Juan March