Skip to main content

Trade exposure and electoral protectionism: evidence from Japanese politician-level data

Review of World Economics volume 157, pages 181–205 (2021)Cite this article

Abstract

This study empirically examines the causal impact of economic shocks of trade on trade policy positions by candidates who run for national elections using politician-level data of Japan during the period from 2009 to 2014. The focus of this research is an examination of how the influence of trade shocks, measured by import competition with China on politicians’ trade policy stance, is related to election pressure. The results revealed that an increase in import exposure deters candidates from supporting trade liberalization, even after considering offset by export exposure. Among other points, this protectionist effect is more pronounced for challengers than for incumbents, and for candidates who run for the Lower House election and are exposed to stronger pressures of elections than those who run for the Upper House election. Taking these findings into account, politicians who face trade shocks tend to appeal to protectionist trade policies as the pressures of elections become stronger.

This is a preview of subscription content, access via your institution.

Access options

Buy single article

Instant access to the full article PDF.

USD 39.95

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Fig. 1

Source: Author’s calculation based on the UTAS data

Fig. 2
Fig. 3

Notes

  1. Using the same candidate data as this study, Ito (2015) and Kagitani and Harimaya (2017) found a correlation between candidates’ campaign promises on trade policies and their constituency’s economic indicators, such as the intensity of import competing industries. These previous studies differ from the present study in that the causal impacts of import changes have not been examined.

  2. In the U.S. Congress, one-third of the senators are elected every 2 years together with the entire membership of the House of Representatives.

  3. Feigenbaum and Hall (2015), who examined the effects of localized economic shocks on voting on trade bills in the U.S. House, show contradictory results to this view. Under the assumption that incumbents can flexibly change policy positions according to the economic conditions, they reported that incumbents tend to vote by favoring protectionism in response to trade shocks, and this effect is more pronounced in districts where the incumbents are most worried about re-election. However, as their data captured voting behavior in the U.S. Congress, the subjects were limited to incumbents and winners in elections.

  4. The UTAS is conducted by Professor Masaki Taniguchi of the Graduate Schools for Law and Politics, University of Tokyo and the Asahi Shimbun.

  5. Elections for the House of Councilors are held every 3 years because half of them are elected every 3 years while their term in office is guaranteed for 6 years.

  6. Tomiura et al. (2016) and Ito et al. (2019) report that the majority of individuals support further trade liberalization in Japan.

  7. Even if the coefficient of interaction term is equal to zero, the interaction effect may be nonzero depending on other covariates (Ai and Norton 2003). As the interaction effect varies according to other covariates, there are variations in the magnitude and statistical significance of the interaction effect.

  8. It has been argued that constituency size is negatively correlated with support for protectionist trade policies (Baldwin 1985; Rogowski 1987; Irwin and Kroszner 1999; Nielson 2003).

  9. According to the World Tariff Profiles 2014, Japan’s simple average most favored nation applied a tariff rate of 19% on agricultural products, which is higher than that of the European Union (EU) (13.2%) and the U.S. (5.3%). In particular, the tariff rate on some commodities is extremely high. For example, the tariff on rice is equivalent to 778%, and the tariff on butter is 360%. However, the average tariff rate on non-agricultural products in Japan is 2.6%, which is lower than that of the EU (4.2%) and the U.S. (3.1%).

  10. In the case of a member of the House of Councilors, as the term in office is longer than the House of Representatives, the number of experienced terms is doubled.

  11. Previous studies on the determinants of individuals’ trade policy preferences consistently show that in comparison to males, females are more likely to prefer import restrictions (Scheve and Slaughter 2001; Mayda and Rodrik 2005; Blonigen 2011; Tomiura et al. 2016; Ito et al. 2019).

  12. The choices are prepared as follows: (1) to appeal to specific people who or organizations that or that have always supported you, (2) to emphasize past achievements, (3) to emphasize ability for government leadership, (4) to emphasize the nature of the leader, and (5) to emphasize your own achievements and nature.

  13. In fact, however, politicians can receive donations from corporations owing to the law that allows free movement of money between a political party and politicians. To some extent, party dummy variables are expected to control for the possible effects of political contributions through this legal loophole.

  14. Column [5] in Table 3 shows that the estimated candidate-level variance component is statistically significant. The results from the likelihood-ratio test indicate that there is significant variability between candidates to support a random-effects ordered logistic regression, rather than a standard ordered logistic regression.

  15. Appendix Table 8 presents the result of interaction effects from the subsample where the candidates answered “Neither.” The main conclusions are maintained.

References

  • Acemoglu, D., Autor, D., Dorn, D., Hanson, G. H., & Price, B. (2000s). Import competition and the great US employment sag of the 2000s. Journal of Labor Economics, 34(1), 141–198.

    Article  Google Scholar 

  • Ai Norton, C. E. C. (2003). Interaction terms in logit and probit models. Economics Letters, 80(1), 123–129.

    Article  Google Scholar 

  • Autor, D., Dorn, D., Hanson, G., & Majlesi, K. (2016). Importing political polarization? The electoral consequences of rising trade exposure (NBER Working Paper No. 22637).

  • Autor, D., Dorn, D., Hanson, G., & Majlesi, K. (2017). A note on the effect of rising trade exposure on the 2016 presidential election, mimeo.

  • Autor, D. H., Dorn, D., & Hanson, G. H. (2013). The China syndrome: Local labor market effects of import competition in the United States. American Economic Review, 103(6), 2121–2168.

    Article  Google Scholar 

  • Baldwin, R. E. (1985). The political economy of U.S. import policy. Cambridge: MIT Press.

    Google Scholar 

  • Baldwin, R. E., & Magee, C. S. (2000). Is trade policy for sale? Congressional voting on recent trade bills. Public Choice, 105, 79–101.

    Article  Google Scholar 

  • Beaulieu, E. (2002). The Stolper–Samuelson theorem faces congress. Review of International Economics, 10, 343–360.

    Article  Google Scholar 

  • Blonigen, B. (2011). Revisiting the evidence on trade policy preferences. Journal of International Economics, 85, 129–135.

    Article  Google Scholar 

  • Che, Y., Lu, Y., Schott, P., & Tao, Z. (2016). Does trade liberalization with China influence U.S. elections? (NBER Working Paper No. 22178).

  • Conconi, P., Facchini, G., & Zanardi, M. (2014). Policymakers’ horizon and trade reforms: The protectionist effect of elections. Journal of International Economics, 94, 102–188.

    Article  Google Scholar 

  • Dauth, W., Findeisen, S., & Suedekum, J. (2014). The rise of the East and the Far East: German labor markets and trade integration. Journal of the European Economic Association, 12, 1643–1675.

    Article  Google Scholar 

  • Devault, J. (2010). CAFTA, campaign contributions, and the role of special interests. Economics and Politics, 22, 282–297.

    Article  Google Scholar 

  • Feigenbaum, J. J., & Hall, A. B. (2015). How legislators respond to localized economic shocks: Evidence from Chinese import competition. Journal of Politics, 77(4), 1012–1030.

    Article  Google Scholar 

  • Gelman, A., & King, G. (1990). Estimating incumbency advantage without bias. American Journal of Political Science, 34(4), 1142–1164.

    Article  Google Scholar 

  • Grossman, G., & Helpman, E. (1994). Protection for sale. American Economic Review, 84, 833–850.

    Google Scholar 

  • Irwin, D. (1994). The political economy of free trade. Journal of Law and Economics, 37, 75–108.

    Article  Google Scholar 

  • Irwin, D., & Kroszner, R. (1999). Interests, institutions and ideology in securing policy change: The republican conversion to trade liberalization after Smoot-Hawley. Journal of Law and Economics, 17, 643–673.

    Article  Google Scholar 

  • Ito, B. (2015). Does electoral competition affect politicians’ trade policy preferences? Evidence from Japan. Public Choice, 165(3), 239–261.

    Article  Google Scholar 

  • Ito, B., Tomiura, E., Mukunoki, H., & Wakasugi, R. (2019). Trade policy preferences and cross-regional differences: Evidence from individual-level data of Japan. Journal of the Japanese and International Economies, 51, 99–109.

    Article  Google Scholar 

  • Jensen, J. B., Quinn, D. P., & Weymouth, S. (2017). Winners and losers in international trade: The effects on U.S. presidential voting. International Organization, 71, 423–457.

    Article  Google Scholar 

  • Kaempfer, W. H., & Marks, S. V. (1993). The expected effects of trade liberalization: Evidence from US congressional action on fast-track authority. World Economy, 16, 725–740.

    Article  Google Scholar 

  • Kagitani, K., & Harimaya, K. (2017). Electoral motives, constituency systems, ideologies, and a free trade agreement: The case of Japan joining the trans-pacific partnership negotiations. Journal of the Japanese and International Economies, 45, 51–66.

    Article  Google Scholar 

  • Lee, D. S. (2001). The electoral advantage to incumbency and voters, valuation of politicians, experience: A regression discontinuity analysis of elections to the U.S. House (NBER Working Paper No. 8441).

  • Magee, S. P. (1980). Three simple tests of the Stolper–Samuelson theorem. In G. M. Grossman & K. Rogoff (Eds.), Issues in international economics (pp. 185–199). London: Oriel Press.

    Google Scholar 

  • Mayda, A. M., & Rodrik, D. (2005). Why are some people (and countries) more protectionist than others? European Economic Review, 49(6), 1393–1430.

    Article  Google Scholar 

  • Nielson, D. L. (2003). Supplying trade reform: Political institutions and liberalization in middle-income presidential democracies. American Journal of Political Science, 47, 470–491.

    Article  Google Scholar 

  • Rogowski, R. (1987). Trade and the variety of democratic institutions. International Organization, 41, 203–223.

    Article  Google Scholar 

  • Scheve, K., & Slaughter, M. (2001). What determines individual trade-policy preferences? Journal of International Economics, 54, 267–292.

    Article  Google Scholar 

  • Tomiura, E., Ito, B., Mukunoki, H., & Wakasugi, R. (2016). Individual characteristics, behavioral biases, and trade policy preferences: Evidence from a survey in Japan. Review of International Economics, 24(5), 1081–1095.

    Article  Google Scholar 

Download references

Acknowledgements

This study was conducted as a part of the project “Empirical Analysis of Corporate Global Activities in the Digital Economy,” undertaken at Research Institute of Economy, Trade and Industry (RIETI). The author is grateful to the two anonymous referees, the participants at the ETSG 2018 Conference in Warsaw and seminar participants at Aoyama Gakuin University, Keio University, Kyoto University, Kwansei Gakuin University, and RIETI for helpful comments and suggestions. This work is supported in part by Japan Society for the Promotion of Science (JSPS) KAKENHI Grant Number 17K03705.

Author information

Authors and Affiliations

  1. College of Economics, Aoyama Gakuin University, 4-4-25 Shibuya, Shibuya-ku, Tokyo, 150-8566, Japan

    Banri Ito

Authors
  1. Banri Ito
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Banri Ito.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendix

Appendix

See Tables 7 and 8.

Table 7 Results from linear probability model excluding “neither”
Full size table
Table 8 Results of interaction effects from the sample excluding “neither”
Full size table

About this article

Verify currency and authenticity via CrossMark

Cite this article

Ito, B. Trade exposure and electoral protectionism: evidence from Japanese politician-level data. Rev World Econ 157, 181–205 (2021). https://doi.org/10.1007/s10290-020-00392-0

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10290-020-00392-0

Keywords

  • Trade policy
  • Protectionism
  • Election
  • Electoral competition

JEL Classification

  • D72
  • F13