Bergh, Andreas and Therese Nilsson, 2008, Do economic liberalization and globalization increase income inequality? Lund University, mimeo

Conclusion: Economic globalization increased inequality

Using the newly developed KOF-index of globalization, as well as the economic freedom index from the Fraser institute, we examine if globalization and economic liberalizations are linked to increases in income inequality within countries. Studying changes between 1980 and 2000, we find a positive link between inequality and liberalization only for certain types of reforms: Trade liberalizations, deregulation of product and labor markets and economic globalization. The Scandinavian welfare states have increased economic freedom and globalization more than other countries, but they have also experienced high increases in income inequality.

Koenig, Tobias, 2008, (Post-)Materialistic Attitudes and the Mix of Capital and Labour Taxation, Leibniz-University of Hannover, mimeo.

Conclusion: Economic globalization reduces the ratio of capital to labour taxes We contribute to the recent trend in public economics which tries to take account of social values in order to explain policy outcomes by examining the role of postmaterialism, a value concept that has been broadly used in other social sciences but not so far in economics. We utilize this concept to explain the mix of capital and labor taxation chosen in a society. Following Inglehart (1997), we define postmaterialism as the relative importance that an individual ascribes to immaterial values over material things. We incorporate this notion into a simple tax model for an open economy. We show that greater emphasis on immaterial values will lower the ratio of capital to labor taxes. Subsequently, we test our theoretical results empirically, using a panel data set comprising 18 OECD countries over the period 1981-2001. The parameter estimates for our postmaterialism proxies developed from the World Values Surveys exhibit the predicted signs; moreover they are highly significant in all regressions. Thus, our empirical analysis supports our central hypothesis that postmaterialism is a determinant for the tax mix chosen in a society.

Koster, Ferry, 2008, The welfare state and globalisation: down and out or too tough to die? International Journal of Social Welfare, doi:10.1111/j.1468-2397.2008.00571.x.

Conclusion: Welfare state effort is not affected by social and political openness, while the level of generosity is negatively affected by social and political openness

Politicians as well as researchers frequently claim that globalisation – and in particular its economic dimension – poses a threat to the welfare state. This article examines whether such a claim is justified by the empirical studies that investigate the relationship between economic openness and the welfare state. Based on the literature, two contrasting hypotheses are distinguished: the first states that economic openness does threaten the welfare state and the second argues that this is not the case. The empirical studies are systematically reviewed in this article: the analysis shows that the second hypothesis is supported most often and it is therefore concluded that economic openness does not threaten the welfare state.

Koster, Ferry, 2008, Economic openness, job insecurity, and the welfare state. A multilevel analysis in 25 European countries. Dag van de Sociologie, May 29th, Leuven, Belgium.

Rao, B. Bhaskara, Artur Tamazian and Krishna Chaitanya Vadlamannati 2008, Growth Effects of a Comprehensive Measure of Globalization with Country Specific Time Series Data, mimeo.

Conclusion: Countries with higher globalization have higher steady state growth rates

Many studies have estimated the growth effects of globalization where globalization was measured with a few economic variables, ignoring its social and political dimensions. Recently Dreher (2006) has developed a comprehensive measure of globalization with several variables from the economic, political and social sectors. He showed, with the panel data methods, that globalization has positive growth effect implying that countries with higher globalization grow faster. We argue that five year average growth rates, used in many panel data studies, are inadequate proxies for the unobservable steady state growth rate (SSGR). Using the Dreher indices we extend the Solow (1956) model to derive country specific estimates of SSGRs for Singapore, Malaysia, Thailand, India and the Philippines. Our results show that countries with higher levels of globalization have higher SSGRs but the growth effects on SSGRs are smaller than in many studies.

Aidt, Toke and Martin Gassebner, 2007, Do autocratic states trade less? Cambridge Working Papers in Economics 0742.

Conclusion: Economic restrictions hamper imports and, to a lesser extent, exports.

The paper analyzes whether the political regime of a country influences its involvement in international trade. Firstly, we develop a theoretical model that predicts that autocracies trade less than democracies. Secondly, we test the predictions of the model empirically using a panel of more than 130 countries for the years 1962 to 2000. In contrast to the existing literature, we use data on individual importing and exporting countries, rather than a dyadic set-up. In line with the model, we find that autocracies import substantially less than democracies, even after controlling for official trade policies. This finding is very stable and does not depend on a particular set-up or estimation technique.

Beer, Paul de and Ferry Koster, 2007, Voor elkaar of uit elkaar? Individualisering, globalisering en solidariteit (Amsterdam: Aksant).

Veel mensen nemen tegenwoordig als vanzelfsprekend aan dat de bereidheid om iets voor een ander te doen afneemt. Hierdoor zou een van de pijlers onder de verzorgingsstaat afbrokkelen. De Nederlandse verzorgingsstaat staat dan ook al een kwart eeuw onder druk. Sinds de jaren tachtig is er een onafzienbare reeks van hervormingen van het sociale stelsel doorgevoerd en nog lijkt het einde niet in zicht. Twee veel genoemde redenen waarom de solidariteit afneemt zijn de individualisering en de globalisering. Naarmate de individualisering doorzet zouden mensen steeds meer op hun eigen belang zijn gericht en steeds minder bereid zijn bij te dragen aan collectieve voorzieningen. Globalisering zou tot gevolg hebben dat een dure verzorgingsstaat in de internationale concurrentiestrijd niet meer te handhaven is. Als de landsgrenzen vervagen is het bovendien steeds minder duidelijk met wie we eigenlijk solidair (moeten) zijn. Dit boek gaat over de vraag of individualisering en globalisering daadwerkelijk een bedreiging vormen voor de solidariteit, en daarmee voor de verzorgingsstaat. Het antwoord op deze vraag blijkt veel genuanceerder en minder eenduidig dan de stellige uitspraken die hierover vaak worden gedaan, suggereren. De termen individualisering, globalisering en solidariteit hebben uiteenlopende betekenissen en laten in de afgelopen 30 jaar allerminst een rechtlijnige ontwikkeling zien. Vervolgens beantwoordt het boek de vraag in hoeverre individualisering en globalisering de solidariteit beïnvloeden en welke consequenties dit heeft voor de toekomst van de verzorgingsstaat.

Bentolila, Samuel; Dolado, Juan J. and Juan F. Jimeno, 2007, Does Immigration Affect the Phillips Curve? Some Evidence for Spain, IZA DP No. 3249.

Conclusion: The fall in unemployment since 1995 would have increased inflation by 2.5 percentage points per year if it had not been offset by immigration

The Phillips curve has flattened in Spain over 1995-2006: unemployment has fallen by 15 percentage points, with roughly constant inflation. This change has been more pronounced than elsewhere. We argue that this stems from the immigration boom in Spain over this period. We show that the New Keynesian Phillips curve is shifted by immigration if natives’ and immigrants’ labour supply or bargaining power differ. Estimation of the curve for Spain indicates that the fall in unemployment since 1995 would have led to an annual increase in inflation of 2.5 percentage points if it had not been largely offset by immigration.

Bergh, Andreas and Martin Karlsson, 2007, Government size, growth and economic freedom in rich countries, prepared for 2007 World Meeting of the Public Choice Society.

Conclusion: Globalization does not affect economic growth

The countries with the biggest government sectors – the Scandinavian welfare states – are also the countries where economic freedom and globalization have increased the most in the 1980s and the 1990s. This suggests that previous research on the effect of government size on economic growth is biased due to omitted variables, because institutional measures such as economic freedom and globalization have so far played a minor role in this research. We examine the hypothesis that big welfare states compensate negative effects of big government through economic freedom and globalization by including the economic freedom index (EFI) and the recently developed KOF-index for globalization in the data set used by several scholars in a recent debate in European Economic Review. We use the Bayesian Averaging of Classical Estimates (BACE) Approach to assess the importance of different variables in explaining growth between 1970 and 1995 among 29 rich countries. Results indicate that government size has a negative growth effect when measured by expenditure, but not when measured by taxes. In general, few variables are robust in explaining growth in our sample. The EFI and KOF indexes have very low explanatory value. Various reasons for these results are discussed.

Bezemer, Dirk and Richard Jong-A-Pin, 2007, World on Fire? Democracy, Globalization and Ethnic Violence, University of Groningen, mimeo.

Conclusion: The negative impact of democracy on ethnic conflict in Sub-Saharan Africa increases with globalization. The combination of democracy and globalization increase ethnic violence in countries without market-dominant minorities.

Recent studies suggest that democracy and globalization lead to ethnic hatred and violence in countries with a rich ethnic minority. We examine the thesis by Chua (2003) that democratization and globalization lead to ethnic violence in the presence of a market-dominant minority. We use different data sets to measure market dominant minorities and employ panel fixed effects regressions for a sample of 107 countries over the period 1984-2003. Our model contains two-way and three-way interactions to examine under which conditions democracy and globalization increase violence. We find no evidence for a worldwide Chua effect, but we do find support for Chua’s thesis for Sub-Saharan Africa.

Buch, Claudia M.; Gayle DeLong and Katja Neugebauer, 2007, International Banking and the Allocation of Risk, IAW Discussion Paper 32.

Conclusion: Economic and political globalization helps to reduce bank risk in OECD countries, while in non-OECD countries, political globalization increases bank risk.

Macroeconomic risks could magnify individual bank risk. Mitigating the influence of economy-wide risks on banks could therefore be very important to maintain a smooth-running banking system. In this paper, we explore the extent to which macroeconomic risks affect banks. We use a bank-level dataset on over 2,000 banks worldwide for the years 1995-2002 to study the effect of macroeconomic volatility, the openness of the banking system, and banking regulations on bank risks. Our measure of bank risk is the volatility of banks' pretax profits. We find that macroeconomic volatility increases banks’ profit volatility and that international openness of the banking system lowers bank risk. We find no impact of banking regulation on profit volatility. Our findings suggest that if policymakers want to lower bank risk, they should seek to lower macroeconomic volatility as well as increase openness in the banking system.

Choi, Seung-Whan, 2007, Beyond Neo-Kantianism: Peace through Globalization? University of Illinois at Chicago, mimeo.

Conclusion: Globalization reduces the number of military interstate disputes.

Although globalization has become one of the most salient issues in international relations during the past few decades, its overall effects on international conflict remain unaddressed. This study presents a causal link between globalization and conflict. Globalization multiplies and reinforces socio-economic and political networks to create an increasingly common psychological disposition towards peaceful coexistence, raises public awareness of leaders’ conflict behavior, and gives pacific transnational entities some room to influence leaders’ foreign policy decision-making. Consequently, the likelihood of conflict in dyads is reduced through increased globalization. Based on a crosssectional, time-series dyadic data analysis for 114 countries during the period from 1970 to 2001, this study reports that globalization, conceived as a threefold outcome of economic, social/cultural, and political integration, produces a dampening effect on militarized interstate disputes. Even when common conflict-related control variables such as democracy, economic interdependence, joint membership in international organizations and others are incorporated into the analysis, an independent explanatory role for globalization remains and even appears to outweigh them. Among the three sub-dimensions of globalization mentioned above, economic globalization appears to be the main driving force for dyadic states to live in peace.

Dischinger, Matthias, 2007, Profit Shifting by Multinationals: Indirect Evidence from European Micro Data, University of Munich Department of Economics Discussion Paper 2007-30.

Conclusion: Globalization increases profits before taxes

We provide indirect empirical evidence of profit shifting behavior by multinational enterprises. This issue is analyzed in an econometric panel study for the years 1995 to 2005 and additionally in a cross–section for 2004 using a large micro database of European subsidiaries of multinationals (AMADEUS) which includes detailed balance sheet items. Our results show a decrease in the unconsolidated pre–tax profits of an affiliated company of approximately 7% if the difference in the statutory corporate tax rate of this affiliate to its parent increases by 10 percentage points. Various robustness checks support our profit shifting evidence. Furthermore, the results suggest an overall shift of profits out of the European Union. In addition, we provide evidence that a higher parent’s ownership share of its subsidiary leads to intensified profit shifting behavior.

Dreher, Axel and Noel Gaston, 2007, Has Globalization Really Had No Effect on Unions? Kyklos 60, 2: 165-186.

Conclusion: Social globalization decreases unionization

For a number of OECD countries, the deterioration of labour market outcomes for less-skilled workers since the early 1980’s has coincided with a steady decline in union membership. Globalisation is often held to be a major contributor to both developments. However, recent studies fail to find evidence to support the presumption that globalisation adversely affects unions. Revisiting this issue by using a novel globalisation index we find that globalisation has indeed contributed to deunionisation. In delving further into the issue, we find that it is social integration, rather than economic or political integration, that has been the main contributor to the decline in union membership.

Dreher, Axel; Sturm, Jan-Egbert and James R. Vreeland, 2007, Development Aid and International Politics: Does membership on the UN Security Council influence World Bank decisions?, Journal of Development Economics, forthcoming.

Conclusion: Political globalization reduces the number of new World Bank projects

We investigate whether temporary members of the UN Security Council receive favorable treatment from the World Bank, using panel data for 141 countries over the period 1970-2004. Our results indicate a robust positive relationship between temporary UN Security Council membership and the number of World Bank projects a country receives, even after accounting for economic and political factors, as well as regional, country and year effects. The size of World Bank loans, however, is not affected by UN Security Council membership.

Fischer, Justina A.V., 2007, Is competition good for social trust? Cross-country evidence using micro-data, Economics Letters, forthcoming

Conclusion: Economic globalization aggravates the trust-building effect of individuals' market integration: stronger competition induced through integration into the international economy makes persons with many commercial contacts trust more strongly in their peers in general.

This paper empirically analyzes the implication of market competition for generalized trust of about 80’000 individuals in more than 60 countries from the World Values Survey. We find that the trust-generating effect of market competition depends on individual market integration.

Gassebner, Martin; Lamla, Michael and James R. Vreeland, 2007, Extreme Bounds of Democracy, Yale University, mimeo.

Conclusion: Globalization does not robustly affect democracy

Gassebner, Martin; Noel Gaston and Michael Lamla, 2007, The Inverse Domino Effect: Are Economic Reforms Contagious? ETH Zurich.

Conclusion: Social globalization fosters economic reforms

This paper examines whether a country's economic reforms are affected by reforms adopted by other countries. A simple model of economic reforms is developed to motivate the econometric work. Unsurprisingly, the model predicts that reforms are more likely when factors of production are internationally mobile and reforms are pursued in other economies. More interesting is the finding that reforms are not driven by greater trade openness. Using changes in the index of economic freedom as the measure of market-liberalising reforms, we examine two issues. First, we examine whether economic reforms are 'habit-forming', and secondly, we identify the most important channels through which reforms are transmitted from country to country. For a panel of 144 countries and the years 1995-2006, we find little evidence that reforms are habit-forming, if anything there is a status quo bias. However, we do find evidence of the importance of reforms in other countries. Consistent with our model, international trade is not a vehicle for the diffusion of economic reforms, rather the most important factor is geographical or cultural proximity.

Gaston, Noel and Gulasekaran Rajaguru, 2007, Has Globalisation increased Australian inequality? GDC Working Paper 7.

Conclusion: Globalisation has increased income inequality

Gemmell, Norman; Richard Kneller and Ismael Sanz, 2007, Foreign investment, international trade and the size and structure of public expenditures, European Journal of Political Economy, forthcoming.

Conclusion: Economic globalization reduces the share of government expenditures allocated to social security

The ‘compensation’ and ‘efficiency’ hypotheses propose that globalization affects both the total, and composition of, public expenditures in different ways. Under the former, economic insecurity leads to expanding public sectors and social expenditures, whereas under the efficiency hypothesis, demands for lower taxes encourage smaller public sectors, and especially ‘privately productive’ spending. We test these hypotheses for a sample of OECD countries from 1980–1997. Using both the inward stock of FDI and openness as measures of globalization we find no effect on the size of government, but FDI significantly shifts the expenditure composition towards social spending, favouring the compensation hypothesis.

Gersbach, Hans, Maik Schneider and Olivier Schneller, 2007, On the Design of Basic Research Policy, mimeo.

Conclusion: No clear correlation between globalization and basic research expenditures

We augment a Schumpeterian growth model with a public basic research sector to examine how much a country should invest in basic research dependent on its technological level and its openness to world trade. We find that the government should invest more in basic research the closer the country is to the world’s technological frontier. Basic research expenditures are increasing in a country’s degree of openness as long as innovation sizes are small. We provide explanations for the empirical evidence regarding basic research expenditures across countries.

Hajer, Jesse, 2007, Effects of Globalization on Social Public Expenditures and Tax Revenues in OECD Countries, mimeo.

Conclusion: Globalization does not affect government expenditure and revenue

Controversy exists regarding the relationship between globalisation and the size of government: some argue that globalisation forces government to reduce its role in the economy due to the competitive pressures unleashed by economic liberalisation; others argue that increased liberalisation necessitates increased government redistribution, and point to rising social public expenditure and taxation as a proportion of GDP as evidence. This paper is an econometric analysis of the effect of globalisation on social public expenditures and taxation as a proportion of GDP. The sample is a panel of 19 OECD countries from 1980 to 2001. Total trade as a proportion of GDP and an index of economic globalisation constructed by Dreher (2005) are used to proxy for the more ambiguous concept of globalisation. Preliminary results indicate that globalisation is negatively correlated with social public expenditures as a proportion of GDP regardless of the globalisation proxy used, in both the levels and growth models. The results on the relationship between taxation and globalisation are more ambiguous: tax revenues as a proportion of GDP are only significantly (and negatively) correlated with globalisation in the growth model when proxied by total trade.

Jacoby, Wade, 2007, EU enlargement: Managing globalization by managing Central and Eastern Europe, mimeo.

Kalmijn, Matthijs and Frank van Tubergen, 2007, Explaining group differences in ethnic intermarriage: A comparative analysis of immigrant children in the United States, Tilburg University & Utrecht University, mimeo.

Conclusion: Immigrant children who come from countries that more strongly participate in cultural globalization are less likely to marry endogamously.

Koster, Ferry, 2007, Globalization, Social structure, and the willingness to help others: A multilevel analysis across 26 countries, European Sociological Review 4: 1-20.

Conclusion: Economic and social openness do not affect the intention to help the sick and disabled, while the willingness to help immigrants is positively related to economic and social openness

This article investigates whether the process of globalization through which countries become increasingly interconnected is related to people’s intention to help others in society. The willingness to help others may be lower in open countries because of more porous national boundaries and lower social cohesion. On the other hand, the openness of countries can also strengthen local structures and increase the awareness of mutual interdependence. Whether globalization is negatively or positively related to the willingness to help others is assumed to dependent on the social structure of countries. In this article hypotheses are tested using individual level data from the European Values Study and country level data from the KOF Index of Globalization, the Eurobarometer, and the International Monetary Fund. The combined dataset includes 31,554 individuals living in 26 European countries. The multilevel analyses show that economic and social openness are not related to the intention to help sick and disabled. The willingness to help immigrants is positively related to economic and social openness. The relationship between openness at the national level and the individual citizen’s willingness to help immigrants is explained by the positive information about the behavior of others.

Law, David S., 2007, Globalization and the Future of Constitutional Rights, University of San Diego.

Lovely, Mary and David Popp, 2007, Trade, Technology and the Environment: Why Do Poorer Countries Regulate Sooner? Syracuse University, mimeo.

Conclusion: Economic restrictions do not robustly affect environmental regulations

While there has been a proliferation of work on environmentally-friendly innovation, nearly all of these studies have focused on highly-developed economies. These countries perform most of the world's R&D and are typically the first to enact new environmental regulations. However, while environmental policy in high income is likely to induce new innovations needed to comply with more stringent regulations, for other countries, the technologies needed to comply with new regulations will already be in use elsewhere in the world when the decision to regulate is made. Thus, rather than asking to what extent environmental regulation induces new environmental innovation, we instead ask to what extent the availability of new technology influences the adoption of new environmental regulations. We begin with a general equilibrium model of a small, open economy, focusing on the political economy decision to regulate emissions. Using a newly-created data set of emission regulations for coal-fired power plants, we test the model’s predictions using a hazard regression of the diffusion of environmental regulation across countries. We show that advances in available pollution control technology do lead to earlier adoption, ceteris paribus, of regulation in developing countries. Moreover, this result is stronger for more open economies, suggesting that free trade increases access to environmentally-friendly technologies. In addition, political economy variables, such as the size of the domestic coal industry, are also important.

Miles, Thomas J. and Eric A. Posner, 2007, Treaties, University of Chicago Law School.

Conclusion: Larger, wealthier, and less corrupt states rely most on bilateral treaties

Treaties are the primary source of international law. But little is known about which countries enter into treaties, which forms the treaties take, and which subjects they address. In addition, the literatures that investigate the relationship between economic growth, state size, and the quality of their institutions overlook the role of treaties. We remedy these omissions by assembling a comprehensive database on treaty-making and conducting empirical tests of hypotheses derived from the literature but that incorporate states' incentives to enter treaties. We find, among other things, that larger, wealthier, and less corrupt states rely on bilateral treaties the most; smaller states are more likely to enter multilateral treaties; and larger states that enter multilateral treaties are more likely than small states to do so subject to reservations. Bilateral treatymaking with respect to economic subjects correlates with government efficiency and economic growth.

Pehnelt, Gernot, 2007, Globalisation and Inflation in OECD Countries, Jena Economic Research Paper 55.

Conclusion: Globalization reduces inflation

During the last two decades, the world has experienced a remarkable process of disinflation, with average inflation rates in industrialized countries falling by 10 percentage points and an even sharper decline of the mean rate of inflation in developing countries. Parallel to the decline in inflation rates, a tremendous increase in economic integration – often referred to as globalisation – has been taking place. In this article, we analyse the effects of globalisation on inflation in OECD countries. We theoretically outline different channels through which globalisation may have influenced inflation dynamics and give an overview on the existing empirical evidence on this issue. In the empirical analysis we show that globalisation has contributed to the disinflation process in OECD countries since the 1980s. Inflation rates became much less prone to domestic parameters, especially the domestic output gap. Global factors such as the output gap of the main trading partners became more important in determining national inflation rates. Furthermore, economic freedom and the degree of globalisation are positively related to the disinflation process. Central bank independence seems to have contributed to the decline in inflation rates among OECD countries process, but the effect is rather modest. Though the inertia of inflation can still be observed, the persistence of inflation has considerably declined since the early 1990s.

Potrafke, Niklas, 2007, Social expenditures as a political cue ball? OECD countries under examination, mimeo, Humboldt University Berlin (update of DIW Discussion Paper No. 676).

Conclusion: Globalization, above all economic globalization, has mitigated social expenditures

This paper examines how national policy affects social expenditures in the context of globalization. We explicitly investigate the interaction of government ideology with trade, foreign direct investment and the KOF index of globalization. There are two basic results: First national policy did not significantly affect social expenditures from 1980 to 2003, but this effect was not due to globalization. Second we detect policy differences between the eighties and the nineties. Left governments did expansionary policies in the eighties – mitigated by globalization. In the nineties, they became more responsible in general, but globalization did not at all curtail ideological spending policies.

Potrafke, Niklas, 2007, Public health expenditures in OECD countries: Does policy matter?, mimeo, Humboldt University Berlin.

Conclusion: Globalization, above all economic globalization has mitigated public health expenditures

This paper examines how policy affects public health expenditures. Analyzing an OECD panel in the period from 1970 to 2004, four political variables are tested: Election years, the ideological party composition of governments, the number of coalition partners and if the ruling government has a majority in parliament. An electoral cycle is detected to be spurious and driven by endogenous election years. Interestingly, the impact of the governments’ ideological orientation depends on the time interval considered. Left governments increased spending from 1970 to 1990, but decreased it from 1991 to 2004. Expenditures were smaller, the higher the number of coalition partners. Moreover, our empirical results indicate differences in health policy between single OECD countries and thereby confirm case studies. Overall, policy did not affect public health expenditures in a steady way and thus our results also confirm the special characteristics of the commodity health.

Potrafke, Niklas, 2007, Political effects on the allocation of public expenditures: Empirical evidence from OECD countries, mimeo, Humboldt University Berlin (update of DIW Discussion Paper No. 653).

Conclusion: Globalization does not affect budget composition

This paper examines the effects of political determinants on the allocation of public expenditures. We analyse two data sets of different expenditure categories (COFOG) covering a broad time period: An OECD panel from 1970 to 1989 as well as from 1990 to 2005. We find that national policy had stronger impacts till the beginning of the nineties. Left governments set other priorities than right governments, but this required that they had a majority in parliament. Electoral effects are detected as endogenous and the size of coalition emerges as unimportant.

Stanton, S. Jr., Joseph J. St. Marie and Shadad Naghshpour, 2007, The Effects of Globalization on Ethnic Conflict; A Cross-Sectional Time-Series Analysis, 1970-2003, University of Southern Mississippi, mimeo.

Conclusion: Cultural engagement in social forms and political forms leads to increased conflict. Economic engagement led to a decrease in conflict behavior, while political globalization increased both protest and rebellion.

While one may argue that the world has indeed been flattened by globalization and westernization a more appropriate analogy would be of a carpet spread out over messy floor. Certainly there are flat spots but there are also humps and bumps of differing size and magnitude. These bumps are the object of this paper. We ask a simple question: do globalization and westernization affect ethnic conflict? To this end we will examine how globalization in its constituent parts affects ethnic conflict. First, we provide analytical distinctions between our two theoretical concepts. Second, we outline the literature pertaining to our research question and third propose hypotheses to test. In a fourth section we sketch out the methods we utilize and present our results. We conclude and explore avenues for further research in a final section.

Tavares, Samia Costa, 2007, Democracy and Trade Liberalization, Rochester University.

Conclusion: Democracy is more likely to lead to openness than vice-versa

The 1980s and 90s witnessed a worldwide surge towards democracy, as various dictatorships collapsed. This paper uses a sample of up to 133 countries for the period 1960-2004 to explore the relationship between regime change and trade policy. In particular, it seeks to investigate the following questions: does democratization induce a country to liberalize trade? Do countries that remained closed still move towards relatively freer trade? And what about trade liberalization, is it significant in bringing about democratization? Results suggest that whereas becoming more democratic does lead to greater openness, it depends on how each are measured. The effect of globalization on democracy, however, is mostly insignificant, suggesting that democracy is more likely to induce openness than vice-versa.

Torgler, Benno, 2007, Trust in international organizations: An empirical investigation focusing on the United Nations, Review of International Organizations, forthcoming.

Conclusion: Stronger capacity to act globally in economic and political environment increases trust in the UN

The literature on social capital has strongly increased in the last two decades, but there still is a lack of substantial empirical evidence about the determinants of international trust. This empirical study analyses a cross-section of individuals, using micro-data from the World Values Survey, covering 38 countries, to investigate trust in international organizations, specifically in the United Nations. In line with previous studies on international trust we find that political trust matters. We also find that social trust is relevant, but contrary to previous studies the results are less robust. Moreover, the paper goes beyond previous studies investigating also the impact of geographic identification, corruption and globalization. We find that a higher level of (perceived) corruption reduces the trust in the UN in developed countries, but increases trust in developing and transition countries. A stronger identification with the world as a whole also leads to a higher trust in the UN and a stronger capacity to act globally in economic and political environment increases trust in the UN.

Tsai, Ming-Chang, 2007, Does Globalization Affect Human Well-Being? Social Indicators Research 81, 1: 103-126.

Conclusion: Globalization increases human welfare

The prevailing theorizing of globalization’s influence of human well-being suggests to assess both the favorable and unfavorable outcomes. This study formulates a dialectical model, exploits a comprehensive globalization measure and uses a panel data during 1980-2000 to empirically test global flows’ various human consequences. The outcomes from random effect modeling reveal significant positive impacts of economic globalization on the physical quality of life of a country. The overall globalization index is found to generate expected favorable influence on an overall human development index. Several hypotheses about globalization’s negative effects through increasing societal instabilities and reducing state power and social spending are not supported in analysis. It is concluded that globalization identified by increased global flows and exchanges contributes more than hampers progress in human welfare.

Vandenbussche, Hylke and Maurizio Zanardi, 2007, The Chilling Effects of Antidumping Law Proliferation, Université Catholique de Louvain and Tilburg University.

Conclusion: Antidumping depresses imports.

Advocates of antidumping (AD) laws downplay their effects by arguing that the trade flows that are subject to AD are small and their distortions negligible. This paper is the first to counter that notion by quantifying the effect of the adoption of AD laws on trade flows. The recent proliferation of AD laws across countries, which increased especially since the early nineties, provides us with a unique opportunity to estimate the true trade effects of adopting and enforcing AD laws. For this purpose, we estimate the effect of AD on bilateral trade flows between the new adopters and their trade partners using a gravity model spanning 21 years (1980-2000) of annual observations. Our estimates confirm that the AD effects are not small. We find that new tough users have their aggregate imports depressed by 21 billion US$ a year (or 8.9%) as a result of the AD measures they imposed. For some developing countries like India and Taiwan, the dampening effects of AD laws on trade flows are found to largely offset the gains from trade liberalization.

Vinig, G.T. and J. de Kluijver, 2007, Does Globalization Impact Entrepreneurship? Comparative Study of Country Level Indicators, PrimaVera Working Paper 2007-16, University of Amsterdam.

Conclusion: Globalization reduces entrepreneurial activity in low income countries but not in the overall sample.

The impact of increased level of globalization on entrepreneurship remains unexplored area within the domain of international business. In this paper we aim to explore the relationships between globalization and entrepreneurship based on a comparative study of globalization and entrepreneurship indicators at a country level. We use the Global Entrepreneurship Monitor (GEM) data for measuring level of entrepreneurship at a country level, and the KOF index of globalization for measuring level of globalization of a country. We find no statistical evidence for correlation between the level of globalization and the level of entrepreneurship at a country level when tested for all countries in our sample. When testing for low-GDP countries however we find a negative effect of globalization on entrepreneurship. The framework presented in this paper provides a starting point for study and analysis of the relationship between the level of globalization and the level of entrepreneurship.

Bergh, Andreas, 2006, Explaining Welfare State Survival: The Role of Economic Freedom and Globalization, mimeo, Ratio Institute, Stockholm.

Conclusion: Globalization poses no threat to the welfare state

Using the economic freedom index and the newly developed KOF-index of globalization, it is shown that the Scandinavian welfare states have experienced faster, bigger and more consistent increases in these areas, compared to the smaller Central-European and the Anglo-Saxon welfare states. The market economy and globalization hence do not pose threats to these welfare states, but are instead neglected factors in explaining their survival and good economic performance. Big government decreases the economic freedom index by definition, but the welfare states compensate in other areas, such as legal structure and secure property rights.

Bjørnskov, Christian,  2006, Globalization and Economic Freedom: New Evidence Using the Dreher Indices, University of Aarhus.

Conclusion: Economic and social globalization affect economic freedom, while political globalization does not

This paper employs a panel data set to estimate the effect of globalization on four measures of economic freedom. Contrary to previous studies, the paper distinguishes between three separate types of globalization: economic, social and political. It also separates effects for poor and rich countries, and autocracies and democracies. The results show that economic globalization is negatively associated with government size and positively with regulatory freedom in rich countries; social globalization is positively associated with legal quality in autocracies and with the access to sound money in democracies. Political globalization is not associated with economic freedom.

Dreher, Axel, 2006, The Influence of Globalization on Taxes and Social Policy – an Empirical Analysis for OECD Countries, European Journal of Political Economy 22, 1: 179-201.

Conclusion: Globalization does not affect government spending, taxes on labour, and taxes on consumption. Results for taxes on capital depend on how tax ratios are calculated

Using panel regression for the period 1970-2000 the paper analyzes whether globalization has influenced the OECD countries’ social and overall spending as well as their tax rates on labor, consumption and capital. Accounting for potential endogeneity of the regressors, the results show that globalization (measured by an index covering 23 variables) did not generally decrease the leeway for independent economic policy. Globalization even increased implicit tax rates on capital (as calculated by Carey and Rabesona, 2002) – a result that is mainly driven by economic integration. However, there seems to be competition over tax rates on capital when data based on legislation as suggested by Devereux and Griffith (2003) is employed. Depending on the method of estimation, increasing social integration also influences policies, while political integration does not matter for economic policy in most specifications.

Dreher, Axel, 2006, IMF and Economic Growth: The Effects of Programs, Loans, and Compliance with Conditionality, World Development 34, 5: 769-788.

Conclusion: Globalization increases economic growth

In theory, the IMF could influence economic growth via several channels, among them advice to policy makers, money disbursed under its programs, and its conditionality. This paper tries to separate those effects empirically. Using panel data for 98 countries over the period 1970-2000 it analyzes whether IMF involvement influences economic growth in program countries. Consistent with the results of previous studies, it is shown that IMF programs reduce growth rates when their endogeneity is accounted for. There is also evidence that compliance with conditionality mitigates this negative effect, while the overall impact, however, remains negative. IMF loans have no robust statistically significant impact.

Dreher, Axel, 2006, Does Globalization Affect Growth? Evidence from a new Index of Globalization, Applied Economics 38, 10: 1091-1110.

Conclusion: Globalization increases economic growth

The paper develops an index of globalization covering its three main dimensions: economic integration, social integration, and political integration. Using panel data for 123 countries in 1970-2000 it is analyzed empirically whether the overall index of globalization as well as sub indexes constructed to measure the single dimensions affect economic growth. As the results show, globalization indeed promotes growth. The dimensions most robustly related with growth refer to actual economic flows and restrictions in developed countries. Although less robustly, information flows also promote growth whereas political integration has no effect.

Dreher, Axel and Noel Gaston, 2006, Has Globalisation Increased Inequality? Review of International Economics, forthcoming.

Conclusion: Economic globalisation (and to a lesser extent political integration) have exacerbated wage inequality in developed countries

There has been no shortage of theories which purport to explain why globalisation may have, adverse, insignificant or even beneficial effects on income and earnings inequality. Surprisingly, the empirical realities remain an almost complete mystery. In this paper we use data on industrial wage inequality, household income inequality as well as measures of the economic, social and political dimensions of globalisation to examine this controversial issue. We find that the economic dimension of globalisation, and to a lesser extent political integration, have exacerbated wage inequality in developed countries. In contrast, the impact of globalisation on both income and earnings inequality in less-developed countries has been negligible.

Dreher, Axel; Jan-Egbert Sturm and Heinrich W. Ursprung, 2006, The Impact of Globalization on the Composition of Government Expenditures. Evidence from Panel Data, Public Choice, forthcoming.

Conclusion: Globalization does not affect the composition of government expenditures

According to the disciplining hypothesis, globalization restrains governments by inducing increased budgetary pressure. As a consequence, governments shift their expenditures in favour of transfers and subsidies and away from capital expenditures. This expenditure shift is potentially enhanced by citizens’ preferences to be compensated for the risks of globalization (“compensation hypothesis”). Employing two different datasets and various measures of globalization, we analyze whether globalization has indeed influenced the composition of government expenditures. For a sample of 108 countries, we examine the development of four broad expenditure categories for the period 1970-2001: capital expenditures; expenditures for goods and services; interest payments; and subsidies and other current transfers. A second dataset provides a much more detailed classification: public expenditures, expenditures for defence, order, economic environment, housing, health, recreation, education, and social expenditures. However, this second data set is only available since 1990 – and only for the OECD countries. Our results show that globalization did not influence the composition of government expenditures.

Gassebner, Martin; Noel Gaston and Michael Lamla, 2006, Relief for the Environment? The Importance of an Increasingly Unimportant Industrial Sector, Economic Inquiry, forthcoming.

Conclusion: Globalization does not significantly affect the stringency of environmental standards

Deindustrialisation, stagnant real incomes of production workers and increasing inequality are latter-day features of many economies. It’s common to assume that such developments pressure policy-makers to relax environmental standards. However, when heavily polluting industries become less important economically, their political importance also tends to diminish. Consequently, a regulator may increase the stringency of environmental policies. Like some other studies, we find that declining industrial employment translates into stricter environmental standards. In contrast to previous studies, but consistent with our argument, we find that greater income inequality is associated with policies that promote a cleaner environment.

Hattari, Rabin and S. Rajan Ramkishen, 2006, Intra-Asian FDI Flows: Trends, Patterns and Determinants.

Conclusion: economic openness promoted intra-Asian FDI flows

Jamison, Eliot A.; Dean T. Jamison and Eric A. Hanushek, 2007, The effects of education quality on income growth and mortality decline, Economics of Education Review 26, 6: 771-788.

Conclusion: Globalization increases economic growth.

Previous work shows that higher levels of education quality (as measured by international student achievement tests) increases growth rates of national income. This paper begins by confirming those findings in an analysis involving more countries over more time with additional controls. We then use the panel structure of our data to assess whether the mechanism by which education quality appears to improve per capita income levels is through shifting the level of the production function (probably not), through increasing the impact of an additional year of education (probably not), or through increasing a country's rate of technological progress (very likely). Mortality rates complement income levels as indicators of national well-being and we extend our panel models to show that improved education quality increases the rate of decline in infant mortality. Throughout the analysis, we find a stronger impact of education quality and of years of schooling in open than in closed economies.

Lamla, Michael, 2006, Long-run Determinants of Pollution: A Robustness Analysis, ETH Zurich, March.

Conclusion: Globalization reduces water pollution

The paper examines how robust economic, political, and demographic variables are related to water and air pollution. Employing Bayesian Averaging of Classical Estimates (BACE) for a set of 47 countries, 33 variables and 3 proxies for air and water pollution over a period from 1980 to 1995 we confirm the Environmental Kuznets Curve hypothesis, highlight the relevance of efficient production technologies and underline the importance of inequality and resources for environmental quality.

Sirimaneetham, Vatcharin, 2006, Explaining policy volatility in developing countries, University of Bristol Discussion Paper No. 06/583.

Conclusion: Political Globalization does not robustly affect the volatility of macroeconomic policy.

This paper studies the causes of policy volatility in developing countries during 1970-1999. To construct composite policy volatility indicators, the paper applies a robust principal components analysis to Washington Consensus policy variables. The results suggest three dimensions of policy volatility: Fiscal, macroeconomic and development policies. The paper shows that more stable macroeconomic policy is associated with higher income growth, before turning to the determinants of volatility. Using a Bayesian approach which addresses the model uncertainty problem, the paper finds that macroeconomic policy is more volatile in countries that adopt a presidential system, have weaker political constraints, where government stability is lower, and that are former British colonies. Adopting a parliamentary regime helps to stabilize policy.

Bjørnskov, Christian; Axel Dreher and Justina A.V. Fischer, 2005, Cross-Country Determinants of Life Satisfaction: Exploring Different Determinants across Groups in Society, Social Choice and Welfare 30, 1: 119-173.

Conclusion: Globalization does not significantly affect life satisfaction

This paper explores a wide range of determinants of life satisfaction exploiting a database of 73 countries, based in turn on about 100000 observations. The determinants can be categorized in four groups: political, economic, institutional factors and human development and culture. The relevance of these factors is estimated on country-level averages of satisfaction of sub-groups of national populations according to gender, income and political orientation, using OLS, robust regression and Extreme Bounds Analysis techniques. Our results show that only a small number of factors robustly influence life satisfaction across countries while the importance of a large number of alternative factors suggested in the previous literature is rejected.

Schmelzer, Paul, 2005, Increasing employment instability among young people? Labor market entries and early careers in Great Britain since the 1980s.

Conclusion: U.K. economic globalization index deteriorates the chances of successful transitions; the worldwide globalization index seems to facilitate transition into the labor market

Since the 1980s Great Britain has experienced radical flexibilization and deregulation of the labor market which have been accelerated by the processes of globalization. We suppose that these changes are especially pronounced for younger generations since they are devoid of work experience, lobby, networks, and seniority. Thus, in our first subject we focus on the destabilization of the employment careers of young people. The second subject of our study investigates which groups are especially exposed to increasing market risks. Both issues will be approached by taking into account national institutional settings. By surveying the duration until initial job attainment and the quality of the first job we will capture the school-to-work transitions. The upward and downward mobility, the risks of unemployment, and the transition to the reemployment will shed light on the early careers of the young entrants. The results of our analyses reveal that the duration until initial employment didn't change over time. But the share of precarious and atypical forms of work increased dramatically since 1980. Since in the British context the quality of initial employment is more an indicator for a deteriorating situation than the time spent job searching, we confirm our assumption about increasing difficulties of transitioning into the first job. With respect to the early careers we observe a clear picture of destabilization of the early careers of the young generation. The risks of moving downward and of becoming unemployed and also the chances of moving upward and becoming re-employed increased over the cohorts considerably. The deterioration of school-to-work transition and the destabilization of early careers are strongly dependent on the individual attributes and the path dependencies of one's life course. We can confirm our hypothesis of the growing inequalities among different groups. The entrants who start their first job in a higher occupational class are more likely to get full and permanent contracts and are protected from the risk of becoming unemployed. The welleducated who occupy better positions are better protected from employment risks, and display better chances of becoming established on the labor market. Disadvantageous positions evolve path dependencies over one's life course impeding the establishing processes on the labor market.

Sameti, Morteza, 2004, Globalization and Size of Government Economic Activities, Isfahan University, mimeo.

Conclusion: Globalization increases government size

Two main aspects of globalization “economic and social globalization” and several indices for evaluation of globalization have been introduced and measured in this paper. The indices are containing of economic and social integration of globalization. Then affects of the globalization indices on government economic activities was estimated for two decade 80th and 90th. For this propose, some dimensions of globalization was reviewed in section 1, globalization and its impact on government activities in section 2, Globalization and the Size of Government in DC in comparison in LDC Countries in section 3 and globalization indices and government economic activities variation was reviewed in section 4.

Ekman, Björn, 2003, Globalization and Health: An Empirical Analysis Using Panel Data, Lund University, mimeo.

Conclusion: Globalization increases life expectancy

Globalization has received considerable attention in the past decade or so. Its effects are suggested to impact on most aspects of economic, political, and social life, including that of the health of populations. A possible causal effect running from globalization to population health may imply important policy effects, both at the national and at the international level. The aim of this paper is to explore the relationship between globalization and public health outcomes. First, we define the two concepts and suggest possible measures. We then outline a simple analytical framework. A brief look at the recent literature is followed by a quantitative assessment using aggregate level panel data for 123 countries in the period 1975-2000. A positive (seemingly non-linear) correlation can be detected between a composite measure of globalization and population health as measured by life expectancy at birth. Finally, we discuss possible extensions of the empirical analysis and suggest a number of future research options.