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Explaining Protectionism Support: The Role of Economic Factors

DOI: 10.1155/2013/954071

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Abstract:

We find that individuals’ opinions concerning protectionist policies match with how their revenue could be affected in the medium or long term by trade liberalisation in line with predictions of the comparative advantage models. An adverse macroeconomic context (large increase in the unemployment rate or inflation rate) increases protectionist attitudes, thus reflecting that people do not trust that free trade will lead to lower prices or create jobs despite trade theory optimism. People share a mercantilist view of trade since more imports increase protectionism support, while people positively value exports, especially in small countries. Regarding policy measures, while protectionist measures do not influence protectionism support in general, easy access to exports reduces people’s support for protectionism. 1. Introduction Trade restriction levels applied by countries are strongly correlated with average support for protectionism among residents. But what elements shape these individuals’ attitudes? Protectionism support depends not only on noneconomic factors such as values and demographic characteristics but also on the labour market and the macroeconomic situation. In this study, we examine some yet-to-be-studied factors that may influence opinions towards trade policies. We hypothesise that individual support for protectionism is not only affected by the above-mentioned factors but also by the macroeconomic context, importance of trade and size of the country, trade policies applied by the resident’s country on its imports, and trade policies applied by other countries on exports of the resident’s country. The International Social Survey Programme (ISSP) survey of 2003, which is available for more than thirty countries, offers a good opportunity to study reasons for protectionism support. To investigate this issue, we explain protectionism support using an ordered probit model that includes individual attributes and country characteristics. We build on the existing literature and bring new elements into the discussion. First, we test the influence of macroeconomic variables such as gross national income (GNI) per capita, inflation, unemployment rates, and risk index on individual attitudes. Second, we check if individual support for protectionism is in line with the predictions of comparative advantage models. Third, we study the link between import and export shares in GDP and individual opinions towards trade. Finally, we study how trade restrictions on imports influence individual attitudes and if access granted to country exports has an

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