How does (FDI) globalization affect and get affected by welfare provisions and (labor) standards? (FDI) Globalization Welfare provisions (FDI) Globalization (Labor) regulatory standards

Answer depends on varying conceptions of the distributional consequences of (FDI) globalization, and on disposition and representation of individuals in light of those consequences… (FDI) Global- ization Welfare Provi- sions/ Labor Stan- dards Objective Risk/ insecurity Subjective Risk/ insecurity Polit. demands Social- Actor Represent. Party Rep- resent. FDI causes: Δ Level of labor demand (e.g. upskilling) Δ Elasticity of labor demand (e.g. barg.power vis a vis non- wage labor costs)

…and depends also on varying conceptions of how (FDI) globalization rewards or punishes welfare provisions/labor standards. (FDI) Global- ization Welfare Provisions/ Labor standards Investors favor or avoid what welfare states, labor standards yield e.g. Tax burden/distribution Non-wage labor costs Labor-markt. (in)flexibility Labor militancy/peace

Debate has moved from whether globalization constrains, spurs or has little effect on welfare compensation, to under what conditions it has effects: (FDI) Global- ization Objective Risk/ insecurity Subjective Risk/ insecurity Polit. demands Social- Actor Represent. Party Rep- resent. It depends on the kind of FDI: e.g. varying kinds of “horizontal” versus “vertical” FDI It depends on aspects of welfare: e.g. Pension progs. versus educ. or ALMP Welfare/ labor Stan- dards

Debate has moved from whether globalization constrains, spurs or has little effect on welfare compensation, to under what conditions it has effects (FDI) Global- ization Objective Risk/ insecurity Subjective Risk/ insecurity Polit. demands Social- Actor Represent. Party Rep- resent. It depends on the institutions that shape aggregation of interests: * Levels of democracy (e.g. Adsera and Boix) * Left-labor power/Corporatism (e.g. Garrett 1998; Swank 2002) * PR/#legis.parties (Swank 2002) * State capacities to implement compensation (Mares 2004) * State/party credibility to provide compensation rather than protection (Boix 2004; Carey and Shugart; Iversen and Soskice…) Welfare/ labor Stan- dards

Debate has moved from whether globalization constrains, spurs or has little effect on welfare compensation, to under what conditions it has effects (FDI) Global- ization Welfare/ labor Stan- dards Objective Risk/ insecurity Subjective Risk/ insecurity Polit. demands Social- Actor Represent. Party Rep- resent. It depends on the institutions/conditions that mediate whether investors reward or punish welfare/standards: * Corporatism/Left-labor standards (e.g. Garrett 1998) * CME versus LME-based comparative advantage * Budget deficits (Gaston and Nelson 2004) * Factor endowments (e.g. developed versus developing countries)

Debate has moved from whether globalization constrains, spurs or has little effect on welfare compensation, to under what conditions it has effects (FDI) Global- ization Objective Risk/ insecurity Subjective Risk/ insecurity Polit. demands Social- Actor Represent. Party Rep- resent. And the list can easily go on: * issue-specific policy institutions as mediating variable (access to protection vs broad comp.): * Levels of asset-specificity (general versus specific skills of individuals) * Ideas and ideology (e.g. ideas about luck versus pluck in determining one’s own fortune, Alesina et.al.) Welfare/ labor Stan- dards

Most everything just said applies (in principle) to the question of whether and under what conditions welfare provision or (labor) regulatory standards affect attitudes towards (FDI) globalization: (FDI) Global- ization Objective Risk/ insecurity Subjective Risk/ insecurity Polit. Demands (support for global- ization) Social- Actor Represent. Party Rep- resent. Welfare/ labor Stan- dards

What do the empirics say? The jury’s still out. Most work has been based on aggregate correlations between welfare/labor standards and measures of openness (CS, TSCS), and here results have been sensitive to estimation approaches: * Varying measures of “globalization” and “welfare or other standards.” * Levels versus first-differences * Controls * Time periods and countries in samples

What do the empirics say? The jury’s still out. Application of survey work to this debate is relatively new, and in its infancy * Some work on (FDI) globalization subjective risk (e.g. Scheve and Slaughter 2001, 2004; Aldrich et.al. 2002) * Less but growing work on welfare support for openness (e.g. Scheve and Slaughter 2004b; Hays et.al. 2005) * And a bit on MNC-owner attitudes towards welfare and other provisions (e.g. Mosley 2000; 2002) * A bit on welfare subjective risk (e.g. Anderson 2004; Anderson and Pontusson 2002; Aldrich)

Lots more could (and probably will) be done with existing survey instruments and other methods * Using NES, ISSP, WVS, Eurobarometer, etc., many of the nuanced arguments could be investigated * Comparative manifestos as measure of party “attitudes” * …and, of course, good ‘ol qualitative case study work can and should fill in lots of the gaps

…But given problems with existing surveys and other existing options, the survey instruments contemplated here have big value-added: * Kinds of questions asked: (e.g. on support for standards as well as various kinds of welfare provision; on attitudes about various kinds of FDI and other openness) * How the questions are asked: (e.g. avoiding “less or more” phrasing, adding budget constraint in framing and phrasing) * Coding and sampling: (e.g. to capture details of industry of employment, and capturing variation in globalization, welfare/labor standards, and many possible economic and institutional mediating conditions)

(FDI) Global- ization Welfare/ labor Stan- dards Objective Risk/ insecurity Subjective Risk/ insecurity Polit. demands Social- Actor Represent. Party Rep- resent. …and most obviously and importantly, project contemplates linked and comparable surveys addressing many of the links connecting (FDI) globalization to welfare provisions and labor standards. e.g.

…a few thoughts on surveys design, in light of this debate * Cross-section is super valuable (to capture variation in main and mediating parameters) * Sampling issues are key and tricky (e.g. want non-tradables unions, but also lots of different kinds of industrial unions) * Questions wish-list is long and hard to limit, but…(e.g. questions on attitudes towards various kinds of openness and of labor standards and welfare programs; questions about trade-offs or policy bundles)