There are strong reasons for polarization
Nov 2020

There are strong reasons for polarization

US Elections 2020 | The economic decline of some regions has deepened the ideological divide.
A commentary by David Dorn.

This article was first published in the newspaper «Finanz und Wirtschaft» on 15 October 2020. Edited for layout purposes by the UBS Center.

The Covid 19 pandemic is keeping the world in suspense. In many countries, governments have adopted precautionary measures to protect public health, following advice from scientific advisory bodies. US President Donald Trump, on the other hand, takes pleasure in ignoring the advice of experts and playing down the dangers posed by the corona virus. Unlike in other countries, wearing a facemask is not considered a medical issue in the USA, but has become an expression of political ideology: Not wearing a mask signals support for the president, while its use can be interpreted as criticism of the government.

It is astonishing that such a large political divide is opening up over a supposedly minor political issue such as the medical response to the virus pandemic. However, the example symbolizes an ideological polarization that has been growing in American society for decades. As recently as the 1990s, for example, voters of the two major American parties agreed that environmental protection should be strengthened. Now, however, only Democrats share this view, while many Republicans, on the contrary, call for less environmental regulation.

US Elections 2020 | The economic decline of some regions has deepened the ideological divide.
A commentary by David Dorn.

This article was first published in the newspaper «Finanz und Wirtschaft» on 15 October 2020. Edited for layout purposes by the UBS Center.

The Covid 19 pandemic is keeping the world in suspense. In many countries, governments have adopted precautionary measures to protect public health, following advice from scientific advisory bodies. US President Donald Trump, on the other hand, takes pleasure in ignoring the advice of experts and playing down the dangers posed by the corona virus. Unlike in other countries, wearing a facemask is not considered a medical issue in the USA, but has become an expression of political ideology: Not wearing a mask signals support for the president, while its use can be interpreted as criticism of the government.

David Dorn, UBS Foundation Professor of Globalization and Labor Markets
David Dorn, UBS Foundation Professor of Globalization and Labor Markets

Fewer moderates, more distrust

The positions on immigration, the welfare state, or the protection of minorities are also widely divergent. As a consequence, fewer and fewer moderate voters remain, and they tend to be more progressive on some themes and more conservative on others. The ideological division of the electorate is also reflected in the American Congress, where Democrats have moved to the left and Republicans to the right. The split between the two major American parties is accompanied by growing distrust of each other's worldviews. Already a third of all voters even describe the other party as a threat to the well-being of the nation. Such distrust of differing political views is a defining characteristic of populism. Populists not only rant against the established powers in the country, but also present themselves as the only political force that represents the interests of the people. In recent years, populism has not only gained momentum in the USA, but is also becoming increasingly visible in many European countries.

What is the reason for the polarization of politics and the rise of populist parties? The renowned US political scientists Pippa Norris and Ronald Inglehart consider these developments to be the result of increasing cultural antagonism among the population. They argue that the values of younger and urban generations are increasingly oriented towards personal autonomy and social diversity, while older and more rural populations emphasize traditional values such as family and religion. The increasing disintegration of the traditional value system has thus triggered a cultural backlash, with right-wing populist parties at the forefront advocating the old order and opposing immigration and cultural diversity.

The question remains, however, why a change in values that has been going on in society for decades should trigger a clear counter-reaction right now. An answer can be found in a scientific study that I published a few days ago in the American Economic Review together with researchers from Sweden and the USA. It shows that the economic decline of some American regions has contributed to the polarization of politics.

In the USA, the wages of highly qualified workers have been rising for decades, while working class incomes have stagnated or even fallen. In addition, there is a growing inequality in regional economic development. In the years 2000 to 2010 alone, there was a dramatic wave of factory closures, which cost a third of all jobs in the industrial sector. Particularly affected were regions with specialization in industries that could not withstand the growing import competition from China, such as the textile or furniture industries. The consequences of factory closures are still being felt years later in the affected areas in the form of reduced employment and lower incomes. It is understandable that voters from economically weakened regions do not demand the maintenance of the status quo, but instead want a significant political change. Accordingly, these regions have tended to elect considerably fewer politically moderate politicians to the US House of Representatives in recent years, and instead mainly supported the populist Republican right wing. The only exceptions to this pattern are areas with a predominantly black and Latin American population that have shifted to the left after economic losses.

Yet America's two big parties have very different ideas about how to help the losers of globalization. Left-wing Democrats like Bernie Sanders want to expand the modest American welfare state to a European level in order to provide greater government support for the unemployed and low-income earners.

The populist Republican Donald Trump, on the other hand, has promised the people no state aid, but the return of the lost factory jobs. In fact, the first three years of his presidency saw a continuation of the long period of economic recovery that had already begun during Barack Obama's presidency. Initial scientific results, however, have shown that the trade war the Trump administration instigated against China has hardly contributed to the creation of new jobs.

The positions on immigration, the welfare state, or the protection of minorities are also widely divergent. As a consequence, fewer and fewer moderate voters remain, and they tend to be more progressive on some themes and more conservative on others. The ideological division of the electorate is also reflected in the American Congress, where Democrats have moved to the left and Republicans to the right. The split between the two major American parties is accompanied by growing distrust of each other's worldviews. Already a third of all voters even describe the other party as a threat to the well-being of the nation. Such distrust of differing political views is a defining characteristic of populism. Populists not only rant against the established powers in the country, but also present themselves as the only political force that represents the interests of the people. In recent years, populism has not only gained momentum in the USA, but is also becoming increasingly visible in many European countries.

What is the reason for the polarization of politics and the rise of populist parties? The renowned US political scientists Pippa Norris and Ronald Inglehart consider these developments to be the result of increasing cultural antagonism among the population. They argue that the values of younger and urban generations are increasingly oriented towards personal autonomy and social diversity, while older and more rural populations emphasize traditional values such as family and religion. The increasing disintegration of the traditional value system has thus triggered a cultural backlash, with right-wing populist parties at the forefront advocating the old order and opposing immigration and cultural diversity.

Biden would face a Herculean task

With the Covid 19 crisis, the situation on the American labor market has again deteriorated massively this year, and economic problems are a major issue in the current presidential election campaign. Democratic candidate Joe Biden has announced major infrastructure investments that should also benefit the American industrial sector. In addition, he can score points with many voters with his promise to expand state health care in times of the Covid 19 pandemic.

If the favored Joe Biden wins the presidential election, he faces a Herculean task. His infrastructure and aid programs can make an important contribution to alleviating the worst economic hardships in the USA in the coming years. However, the advanced ideological polarization, which is also driven by politicized media and the echo chambers of social networks, will not be so easily reversed.

With the Covid 19 crisis, the situation on the American labor market has again deteriorated massively this year, and economic problems are a major issue in the current presidential election campaign. Democratic candidate Joe Biden has announced major infrastructure investments that should also benefit the American industrial sector. In addition, he can score points with many voters with his promise to expand state health care in times of the Covid 19 pandemic.

If the favored Joe Biden wins the presidential election, he faces a Herculean task. His infrastructure and aid programs can make an important contribution to alleviating the worst economic hardships in the USA in the coming years. However, the advanced ideological polarization, which is also driven by politicized media and the echo chambers of social networks, will not be so easily reversed.

Quote

One-third of voters consider the other party a national threat.
David Dorn

Contact

UBS Foundation Professor of Globalization and Labor Markets

David Dorn holds the Professorship of Globalization and Labor Markets, endowed by the UBS International Center of Economics in Society. He was previously a tenured Associate Professor at the Center for Monetary and Financial Studies (CEMFI) in Madrid, a Visiting Professor at Harvard University, and a Visiting Scholar at Boston University, MIT, and the University of Chicago.

Professor Dorn`s research connects the fields of labor economics, international trade, economic geography, and macroeconomics. In particular, he studies how globalization and technological innovation affect labor markets.

Professor Dorn is a Research Fellow of the Centre for Economic Policy Research (CEPR) in London, the Institute for the Study of Labor (IZA) in Bonn, and the Center for Economic Studies/ifo Institute (CESifo) in Munich. He is a member of the Editorial Board of the Review of Economic Studies, and an Associate Editor of the Journal of the European Economic Association. He is also the recipient of an ERC-level Starting Grant from the Swiss National Foundation.

UBS Foundation Professor of Globalization and Labor Markets

David Dorn holds the Professorship of Globalization and Labor Markets, endowed by the UBS International Center of Economics in Society. He was previously a tenured Associate Professor at the Center for Monetary and Financial Studies (CEMFI) in Madrid, a Visiting Professor at Harvard University, and a Visiting Scholar at Boston University, MIT, and the University of Chicago.

Professor Dorn`s research connects the fields of labor economics, international trade, economic geography, and macroeconomics. In particular, he studies how globalization and technological innovation affect labor markets.

Professor Dorn is a Research Fellow of the Centre for Economic Policy Research (CEPR) in London, the Institute for the Study of Labor (IZA) in Bonn, and the Center for Economic Studies/ifo Institute (CESifo) in Munich. He is a member of the Editorial Board of the Review of Economic Studies, and an Associate Editor of the Journal of the European Economic Association. He is also the recipient of an ERC-level Starting Grant from the Swiss National Foundation.