COMPARATIVE AND CROSS-CULTURAL MANAGEMENT
Week 1:
Paper by Dani Rodrik:
Populism people who are against globalization. This can create a political backlash, but it
is unpredictable what specific form it will take. Left-wing variants of populism are popular in
Latin America, while right-wing variants are popular in Europe.
Until recently, the worlds globalization pace increased every time, since new technologies
and better communication kept developing. This would eventually lead to a world where
there are democracies (also in the developing countries), who try to address inequality and
exclusion at home while remaining committed to an open economy.
Recent development, however, have turned the globalization pace down (think about Brexit,
Trump’s victory). It is doubtful that this populism will go away.
Populism is a loose label that encompasses a diverse set of movements. All movements
have in common that it is an anti-establishment orientation, a claim to speak for the people
against the elites, opposition to liberal economics and globalization, and often a tendency for
authoritarian governance.
Populism has been on the rise for the last decade and it was very predictable that there was
going to be a political backlash. The focus of the paper is on the economic roots of populism,
in particular the role of globalization, but this is certainly not the only force at play (often they
are dependent on globalization, like technology changes). Economic history and economic
theory will give us strong reasons to believe that advanced stages of globalization are prone
to populist backlash.
The specific form of the populist backlash (=”terugslag”) is unpredictable. We can make a
distinction between left- and right-wing variants of populism, which differ with respect to the
societal cleavages that populist politicians highlight.
What exactly accounts for the emergence of these oppositions? This is related to the forms
in which globalization shocks make themselves felt in society. For example, it is easier to
mobilize along income/social class lines when the globalization shock takes the form mainly
of trade, finance and foreign investment. This is the case with Southern Europe and Latin
America.
It is important to distinguish between the demand and supply sides of the rise in populism.
Economic anxiety due to globalization generate a base for populism, but it does not
determine its political orientation. The relative salience (=”karakteristieke trek”) of cleavages
(=”kloof”) provided by the populist leaders provide the direction and content of the
orientation.
Globalization and the backlash in history
The first era of globalization was under the Gold Standard. This was a time where there was
a rise in trade agreements and liberalization. People were free to move in this era already.
This was all made possible by great achievements in technology and communication.
A political backlash was not surprising. Agricultural prices declined and this gave rise to
import protection (tariffs). Immigration limits also began to appear in the late 19th century
(especially US did this a lot).
There was a backlash against the Gold Standard. Farmers had tight credit conditions and
the Gold standard had a deflationary effect on agricultural prices. The first populist
movement happened during this era. With the goal of an increase money supply and lower
the interest rate, farmers pushed for a return to bimetallism (using both gold and silver as a
standard for money). A return to the Gold Standard was not possible anymore (economic
Week 1:
Paper by Dani Rodrik:
Populism people who are against globalization. This can create a political backlash, but it
is unpredictable what specific form it will take. Left-wing variants of populism are popular in
Latin America, while right-wing variants are popular in Europe.
Until recently, the worlds globalization pace increased every time, since new technologies
and better communication kept developing. This would eventually lead to a world where
there are democracies (also in the developing countries), who try to address inequality and
exclusion at home while remaining committed to an open economy.
Recent development, however, have turned the globalization pace down (think about Brexit,
Trump’s victory). It is doubtful that this populism will go away.
Populism is a loose label that encompasses a diverse set of movements. All movements
have in common that it is an anti-establishment orientation, a claim to speak for the people
against the elites, opposition to liberal economics and globalization, and often a tendency for
authoritarian governance.
Populism has been on the rise for the last decade and it was very predictable that there was
going to be a political backlash. The focus of the paper is on the economic roots of populism,
in particular the role of globalization, but this is certainly not the only force at play (often they
are dependent on globalization, like technology changes). Economic history and economic
theory will give us strong reasons to believe that advanced stages of globalization are prone
to populist backlash.
The specific form of the populist backlash (=”terugslag”) is unpredictable. We can make a
distinction between left- and right-wing variants of populism, which differ with respect to the
societal cleavages that populist politicians highlight.
What exactly accounts for the emergence of these oppositions? This is related to the forms
in which globalization shocks make themselves felt in society. For example, it is easier to
mobilize along income/social class lines when the globalization shock takes the form mainly
of trade, finance and foreign investment. This is the case with Southern Europe and Latin
America.
It is important to distinguish between the demand and supply sides of the rise in populism.
Economic anxiety due to globalization generate a base for populism, but it does not
determine its political orientation. The relative salience (=”karakteristieke trek”) of cleavages
(=”kloof”) provided by the populist leaders provide the direction and content of the
orientation.
Globalization and the backlash in history
The first era of globalization was under the Gold Standard. This was a time where there was
a rise in trade agreements and liberalization. People were free to move in this era already.
This was all made possible by great achievements in technology and communication.
A political backlash was not surprising. Agricultural prices declined and this gave rise to
import protection (tariffs). Immigration limits also began to appear in the late 19th century
(especially US did this a lot).
There was a backlash against the Gold Standard. Farmers had tight credit conditions and
the Gold standard had a deflationary effect on agricultural prices. The first populist
movement happened during this era. With the goal of an increase money supply and lower
the interest rate, farmers pushed for a return to bimetallism (using both gold and silver as a
standard for money). A return to the Gold Standard was not possible anymore (economic
