Democracy and Globalization: Candidate Selection in Open Economies

The impact of globalization on democratic governance is vigorously contested. This debate has largely failed to address the impact of integration on the signature institution of representative democracies|competitive elections. In this paper, I argue that globalization makes the voter's fundamental problem of selecting a desirable representative easier by increasing the revelation of information about incumbent governments. The analysis examines the e ect of economic integration on the relationship between the vote and economic performance. The link between performance and incumbent support depends on the ability of voters to extract useful information about politicians from the economic outcomes that they observe. Employing a simple formal model of the voter's decision, I show that economic integration a ects the voter's extraction problem if it has a systematic e ect on the variance of economic growth. I show empirically that in advanced industrial democracies, trade openness is correlated with less volatile growth. This result implies that voters should weigh economic growth more heavily in more open economies. Thus the relationship between the economy and support for incumbent governments should be increasing in trade openness. Using aggregate data for elections in 19 advanced industrial democracies from 1966 to 1994, I nd strong evidence consistent with this hypothesis.