Publications
Publications
- 2025
- HBS Working Paper Series
Turning Away from the State: Trade Shocks and Informal Insurance in Brazil
By: Paula Rettl
Abstract
How does economic globalization affect vote choices? Conventional wisdom holds that voters who lose from economic integration support parties that propose expanding the welfare state. However, in the Global South, where the state is frequently weak or under-resourced, people often turn to non-state organizations (such as churches) for protection against economic decline. I argue that, in these contexts, negative globalization shocks increase local communities’ dependence on non-state organizations, thereby making the leaders within such organizations more effective political brokers. To test this argument, I propose a shift-share instrument that measures the exposure of Brazilian local labor markets to exogenous changes 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 help explain and describe the contingencies underlying the political consequences of globalization.
Keywords
Global Strategy; Globalized Economies and Regions; Governance; Government Administration; Political Elections; Voting; Latin America; Brazil; South America
Citation
Rettl, Paula. "Turning Away from the State: Trade Shocks and Informal Insurance in Brazil." Harvard Business School Working Paper, No. 25-038, February 2025.