DP6354 Risk, Government and Globalization: International Survey Evidence

Author(s): Anna Maria Mayda , Kevin H. O Rourke , Richard Sinnott

Publication Date: June 2007

Keyword(s): trade attitudes , risk

JEL(s): F13 , P16

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP6354.asp.asp

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.