Turning Away From the State: Trade Shocks and Informal Insurance in Brazil

Format:Print
| Language:English
| Pages:59

Abstract

How does economic globalization affect vote choices? Conventional wisdom holds that voters who lose from economic integration support parties that propose to expand the welfare state. I argue that a key scope condition of this causal relationship is expectations about the state. In the global south, non-state organizations (such as churches and gangs) are often more credible providers of insurance than the state. In these contexts, globalization increases the effectiveness of "organizational brokers" in persuading local communities. To test this argument, I propose a new shift-share instrument that measures the exposure of Brazilian local labor markets to an exogenous decline in exports. By matching this instrument with electoral and survey data, I provide evidence that declining exports increased the power of Evangelical leaders to persuade their congregations to vote against parties that favor welfare-state expansion. My findings explain and describe the contingencies underlying the political consequences of globalization.