DP6354 Risk, Government and Globalization: International Survey Evidence

Author(s): Anna Maria Mayda, Kevin Hjortshøj O'Rourke, Richard Sinnott
Publication Date: June 2007
Keyword(s): risk, trade attitudes
JEL(s): F13, P16
Programme Areas: International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=6354

This paper uses international survey data to document two stylized facts. First, risk aversion is associated with anti-trade attitudes. Second, this effect is smaller in countries with greater levels of government expenditure. The paper thus provides evidence for the microeconomic underpinnings of the argument associated with Ruggie (1982), Rodrik (1998) and others that government spending can bolster support for globalization by reducing the risk associated with it in the minds of voters.