Decompensating domestically: the political economy of anti-globalism

The rise of populism across advanced industrial countries presents a challenge to the institutions and norms that make up the current global order and threatens to undo the global system that has enabled decades of free trade and investment. We outline in this paper a domestic political economy account of the contemporary crisis of the global order, rooted in disenchantment with the redistributive bargain between globalization’s winners and losers. We present individual and local-level evidence that is consistent with this account, first documenting the decline of the embedded liberal compromise over the past 40 years in Europe, and then providing individual-level evidence from the United States of growing protectionism and xenophobia in response to import exposure, particularly among respondents whose occupational profile is most risk-exposed.