Commerce and Coalitions: How Trade Affects Domestic Political Alignments

Abstract

According to the Stolper-Samuelson theorem, free trade benefits locally abundant factors of production—such as land, labor, or capital—and harms locally scarce factors of production. Building on this insight, Ronald Rogowski offers a compelling theoretical and empirical account of political cleavages within countries. He extends the Stolper-Samuelson theorem to reason that increasing exposure to trade—say, because of falling transportation costs—will increase the political power of locally abundant factors, whereas decreasing exposure to trade will hurt these factors. Although not seeking to explain trade policy outcomes (such as the level of protection within a country), Rogowski provides a powerful explanation of the political coalitions and the politics surrounding trade policy. This essay shows how international economic forces can exert a profound effect on domestic politics.