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“Did Austerity Cause Brexit?”

Carsten Allefeld writes:

Do you have an opinion on the soundness of this study by Thiemo Fetzer, Did Austerity Cause Brexit?. The author claims to show that support for Brexit in the referendum is correlated with the individual-level impact of austerity measures, and therefore possibly caused by them.

Here’s the abstract of Fetzer’s paper:

Did austerity cause Brexit? This paper shows that the rise of popular support for the UK Independence Party (UKIP), as the single most important correlate of the subsequent Leave vote in the 2016 European Union (EU) referendum, along with broader measures of political dissatisfaction, are strongly and causally associated with an individual’s or an area’s exposure to austerity since 2010. In addition to exploiting data from the population of all electoral contests in the UK since 2000, I leverage detailed individual level panel data allowing me to exploit within-individual variation in exposure to specific welfare reforms as well as broader measures of political preferences. The results suggest that the EU referendum could have resulted in a Remain victory had it not been for a range of austerity-induced welfare reforms. Further, auxiliary results suggest that the welfare reforms activated existing underlying economic grievances that have broader origins than what the current literature on Brexit suggests. Up until 2010, the UK’s welfare state evened out growing income differences across the skill divide through transfer payments. This pattern markedly stops from 2010 onwards as austerity started to bite.

I came into this with skepticism about the use of aggregate trends to learn about individual-level attitude change. But I found Fetzer’s arguments to be pretty convincing.

That said, there are always alternative explanations for this sort of observational correlation.

What happened is that the places that were hardest-hit by austerity were the places where there was the biggest gain for the far-right party.

One alternative explanation is that these gains would still have come even in the absence of austerity, and it’s just that these parts of the country, which were trending to the far right politically, were also the places where austerity also bit hardest.

A different alternative explanation is that economic did cause Brexit but at the national rather than the local or individual level: the idea here is that difficult national economic conditions motivated voters in those areas to go for the far right, but again in this explanation this did not arise from direct local effects of austerity.

I don’t see how one could untangle these possible stories based on the data used in Fetzer’s article. But his story makes some sense and it’s something worth thinking about. I’d be interested to hear what Piero Stanig thinks about all this, as he is a coauthor (with Italo Colantone) of this article, Global Competition and Brexit, cited by Fetzer.

26 Comments

  1. Bob says:

    Gee, why would I trust the analysis of someone who smears voters who voted to leave the EU as ‘far right’.

    This thing I don’t like is correlated with this other thing I don’t like. People have been asked over and over again why they voted how they did.

    • Andrew says:

      Bob:

      No need to trust the analysis. Just get out of it what you can. Someone who disagrees with you on political issues can still have valid insights.

    • More Noise, Please says:

      Where did the author call Brexit voters “far-right”? The term “far-right” appears only three times in the linked paper, and two of those are in the references. The only time it appears in the text is to point to on of those references: “Steinmayr (2016)’s suggests that contact of natives with refugees in Austria decreased support for the far-right.”

      Perhaps it’s because the author links together support for Brexit and support for a far-right political party? “This paper shows that the rise of popular support for the UK Independence Party (UKIP), as the single most important correlate of the subsequent Leave vote
      in the 2016 European Union (EU) referendum.” UKIP is indeed a far-right party. But that is different from characterizing all voters who voted for Brexit (or for that matter for UKIP) as themselves far-right. It is simply saying where support for the far-right went up, so did support for Brexit. In other words (almost all) far-right voters supported Brexit, but not (necessarily) all Brexit supporters are of the far-right. I can’t find anywhere in the linked text where the author “smear the voters” by characterizing them broadly as a group of extremists.

      But to the extent the author characterizes UKIP as a far-right political party, that is simply calling a spade an immigrant-hating spade. It is no more pejorative than calling the Communist Party of Britain a far-left political party.

      • Bob says:

        I’m referring to the blog post above:

        “biggest gain for the far-right party”

        “motivated voters in those areas to go for the far right”

        UKIP in the Brexit referendum were not a far right party, nor were they ‘immigrant hating’. They were a single issue party which have campaigned for a long time to leave the EU. That party essentially became the Brexit party, and outperformed all others in the recent European elections.

        Labelling them as ‘far right’ is a blatant smear, they had immigrants standing as candidates. They had many voters from immigrant populations.

        “This paper shows that the rise of popular support for the UK Independence Party (UKIP), as the single most important correlate of the subsequent Leave vote”.

        Of course it is, they were standing on a platform of leaving. Who else would a leave voter vote for? They have not ‘gone for the far right’. They have voted for the single issue party which represents their wishes, that is your correlation.

        • More Noise, Please says:

          How far to the right do you need to be to be “far-right”? Is the BNP a far-right party? One could argue that UKIP is just the BNP with a veneer of politeness. But suppose I don’t take up that argument, but am willing to say that UKIP of 2014 (because UKIP of 2018 – 2019 is DEFINITELY a far-right party), was somewhere between the Conservative party and the BNP. The Conservatives are on the right, the BNP is on the far-right. Where was UKIP?

          And what to think of UKIP directly targeting BNP voters:
          “What we did, starting with the Oldham by-election in the North of England is for the first time ever try to deal with the BNP question by going out and saying to BNP voters, if you are voting BNP because you are frustrated, upset with the change in your community, but you are doing it holding your nose because you don’t agree with their racist agenda, come and vote for us. I would think that we have probably taken a third of the BNP vote directly from them.” – Nigel Farage

          It’s also a bit disingenuous to say UKIP were and are not anti-immigrant, especially by pointing out that they had immigrant voters and candidates (that’s a bit like a certain American claiming that they can’t be racist because they have a black friend). Nigel Farage was a master of the British dog whistle. He is the American equivalent of the Nazi’s in polo shirts and khakis. His whole “I’m not anti-immigrant, I just think immigrants should be fully British” schtick is still pretty damned anti-immigrant. Oh and he’s totally fine with Romanian neighbors (wink wink, nudge nudge), unless he happens to be a bit sleepy.

          UKIP was not a single issue party for leaving the EU. They were a single issue party for reducing immigration and deporting illegal immigrants and for “uniculturalism” (Farage’s term, not mine). Leaving the EU was the only way to obtain those goals. Here are the bullet points for the 2010 manifesto:

          – End mass, uncontrolled immigration. UKIP calls for an immediate five-year freeze on immigration for permanent settlement
          – Ensure that after the five-year freeze, any future immigration for permanent settlement will be on a strictly controlled, points-based system similar to Australia.
          – All non-work permit visa entrants to the UK will be required to take out adequate health insurance. Those without insurance will be refused entry.
          – End the active promotion of the doctrine of multiculturalism by local and national government and all publicly funded bodies
          – Return people found to be living illegally in the UK to their country of origin. There can be no question of an amnesty for illegal immigrants

          Farage softened that for 2015 by changing the five-year freeze to a “five-year moratorium on immigration for unskilled workers” and and rather than deporting undocumented immigrants, he wanted to detain them by increasing holding and accommodation arrangements.

          On environmental issues they were and are also far-right. Here is their climate policy from 2010: “To restore a fair balance in science funding, all funding connected with “global warming” research will cease until a Royal Commission has heard the evidence on both sides of the case, with all the rigour of a court of law, and has substantively reported. In the meantime, the large sums now squandered on addressing anthropogenic “global warming” will be redeployed partly to increase funding for science in general, which has suffered at the hands of rapacious climate extremists, and partly to diminish the dangerously unsustainable national debt.”

          On social issue they were and are also far-right. They opposed plans to implement equal marriage rights for same-sex partners. In May 2014, Dave Small, UKIP’s councillor for Redditch borough council, was discovered to have posted racist and homophobic comments on Facebook including the following: “Why on earth is this useless Government pandering to Puffs? I refuse to call them gays, as what has gay to do with Perverts like Elton John and Clair Balding who get their jollies in such disgusting ways. To sum up, they should not allowed to be married, they should go back to the closet.” In January 2013, UKIP fired Olly Neville, leader of UKIP youth organisation (‘Young Independence’) after he stated that he supported gay marriage. Richard Lowe, UKIP candidate for Chester, also had to resign after he supported gay marriage.

          So I ask you again, how far to the right do you need to be to be “far-right”? Are you saying they were a moderate party? A centre-right party?

          I would argue that UKIP was a far-right party that paid special attention to it’s image so that it could maintain plausible deniability about being a far-right party. The alt-right in America (Richard Spencer etc) has adopted a similar strategy. Its seem that under Gerard Batten, they gave up even on the pretense.

          • Terry says:

            You clearly are experiencing a lot of anger. You seem especially angry about people who want to limit immigration.

            But what about you and your views? What is your preferred policy on immigration? Do you think there should be any limit on immigration? If so, what is the maximum amount that you think should be allowed? Actual numbers if possible, please. Why do you think that more than your preferred level should not be allowed? Are there any classes of immigrants that you think should be prevented from immigrating?

            • Martha (Smith) says:

              Terry responded to More Noise Please:
              “You clearly are experiencing a lot of anger.”

              Huh? MNP’s posts don’t include any words or phrases that I would consider as showing anger. They give detailed criticism, but that doesn’t necessarily imply anger.

              • Terry says:

                True, there is a lot of factual statements, but there is anger too. The entire thesis is that UKIP is outrageously extreme and any good person should be angered by his quotes.

                Plus, there is this:

                More Noise, Please said:

                “It’s also a bit disingenuous to say UKIP were and are not anti-immigrant, especially by pointing out that they had immigrant voters and candidates (that’s a bit like a certain American claiming that they can’t be racist because they have a black friend). Nigel Farage was a master of the British dog whistle. He is the American equivalent of the Nazi’s in polo shirts and khakis. His whole “I’m not anti-immigrant, I just think immigrants should be fully British” schtick is still pretty damned anti-immigrant. Oh and he’s totally fine with Romanian neighbors (wink wink, nudge nudge), unless he happens to be a bit sleepy.”

                Nazi name-calling. Racism analogy. “Schtick”. “Pretty damned anti-immigrant”. There are angry words here as well.

                Regardless of the tone, the fact is that the entire post is criticism of UKIP and Farage. My posts asks More Noise, Please if he has anything but criticism. What is Mr./Mrs. Please’s preferred immigration policy?

            • More Noise, Please says:

              Terry, brother (or sister or some gender neutral term of endearment), I ain’t angry. It’s “More noise, please” not “More noise!”

              And schtick is not an angry word, it’s a playful term. The Nazis-in-Polo-shirts analogy was a reference to an actual recent event (Charlottesville – where actual self professed neo-nazis wore polo shirts), not merely invoking the boogieman of National Socialism. The parallel is that the American far-right and the British far-right (and the French far-right for that matter) have in recent years been making conspicuous efforts to be less conspicuous.

              You ask reasonable questions about immigration. I would be happy to have a reasoned debate on appropriate levels of immigration. What I have a problem with and what I am saying is the salient feature that makes the far-right label appropriate is the demonization of immigrants. UKIP in the UK, just as Donald Trump im America built a platform by following these three steps of the far-right hand book.

              1. Invent a story of national decline from some fictional golden past where your specific culture was more dominant and unified (the white Christain British, the white Christain American)
              2. Pin the blame for that decline on some outsider group (immigrants) insinuating that said group is inferior to what should be the dominant culture. Note: the outsider group in this case isn’t actually “immigrants” as a broad group but a more specific class of immigrants. For example, Farage in the “Romanian debacle” that I referenced explicitly drew a contrast between a desirable immigrant group, Germans, and an undesirable group, Romanians. Similarly Donald Trump has expressed a desire to have more immigrants from Norway and less from “shitholes.” I’m both cases the distinction in quality has nothing to do with skills or merit, but rather with ethnicity.
              3. Make promises that if you give me power to get rid of said undesirable group, we will return to greatness.

              That is why the far-right label is appropriate. UKIPs anti-immigrant platform is based on the above and not some reasoned analysis of how many immigrants are appropriate or how such immigrants contribute to a society and economy.

              If you ask me, I would say the aging societies of Britain and America could both use more immigrants. Its not my area of expertise, so I would certainly need to dig into the existing research and data to get you hard numbers. I think to the extent immigrants contribute to growth of the economy by working or creating business, pay their taxes, and fill gaps in the need for labor (eg, agriculture, nursing, construction) then more immigrants are probably a good thing. There is probably some density-dependence like effect where too many immigrants too fast winds up depressing growth. I don’t know where that is, but I would say we’re pretty far from that point.

              • Anonymous says:

                “If you ask me, I would say the aging societies of Britain and America could both use more immigrants.”

                I hesitate to engage in this conversation (e.g. because i don’t like politics, especially about “sensative” stuff) but here we go. I’d like to make 2 points.

                1) I appreciate you mentioning the “far-right” handbook as you call it. I think it’s very important to be aware of history, and the dangers of demonization, mass manipulation and control, and things like that. However, in my opinion and reasoning this should not stand in the way of trying to stick to facts, and “calling a spade a spade”.

                2) I want to note that the gist of your 3 step example can also be used for other things, including doing the exact opposite (e.g. talk in 3 steps how immigrants are needed to “save the economy” and “the country” because they are needed for the “aging” society, only mention the “positive” things that immigration can lead to, etc.).

                On a more abstract level i wonder how one can investigate, and talk about, a possible decline or elevation in a society, or an economy, without investigating and talking about the (kind of) people in it and the (kind of) people responsible for it. I think that’s part of the talking, and investigation.

                If a country has lots of immigration, i think it’s “fair” and “responsible” to in turn investigate the effects of this on societies and economies. If this makes (any) sense, we should be talking about the facts (combined with common sense, wisdom, some philosophy, the law, etc.). I don’t want to get into “the facts” (or common sense, wisdom, some philosophy, the law, etc.) concerning immigration, but i did want to make the above comments.

              • Terry says:

                Thanks for the reasoned reply.

                You focus on economic issues mostly. Not too long ago, that was a common way to see immigration, as labor inputs with negligible cultural or ethnic aspects. Not too long ago, it was common to assume cultural and ethnic factors were fading in importance and these factors could be largely ignored.

                Do you think recent events have suggested that this assumption be reconsidered? Some people claim we are awash in ethnic and racial animosity and oppression and even violence. We seem to be moving towards more ethnic and racial animosity, not less, recently. Identity politics seems to be on the rise. If true, is there a danger that immigration might exacerbate these problems?

                Some immigrants are quite hostile to the natives. This gentleman was given a platform by the NYT to express his animosity towards the west.

                There is a lot of debate these days about whether the United States owes its African-American citizens reparations for slavery. It does. But there is a far bigger bill that the United States and Europe have run up: what they owe to other countries for their colonial adventures, for the wars they imposed on them, for the inequality they have built into the world order, for the excess carbon they have dumped into the atmosphere.

                https://www.nytimes.com/2019/06/07/opinion/immigration-reparations.html?action=click&module=Opinion&pgtype=Homepage

              • More Noise, Please says:

                Terry, I’m responding to your comment dated July 11, 9:18 AM. (Unfortunate that there is a cap on the number of direct replies in a chain).

                “Some people claim we are awash in ethnic and racial animosity and oppression and even violence. We seem to be moving towards more ethnic and racial animosity, not less, recently. Identity politics seems to be on the rise. If true, is there a danger that immigration might exacerbate these problems?”

                You bring up a interesting point, but one that will be slippery to define and discuss on measurable “objective” terms. For me, I think we’re cutting close to issue that I consider moral ones. That is, I take it as axiomatic that the person that feels animosity towards another person solely on the basis of cultural, ethnic or racial differences is the person in the wrong. Perhaps I can illustrate what I mean by ways of a funny story related to me by a friend: an older middle-aged English man was waiting for a train in the southern UK that he shared with a few other souls, including two women, one of whom was wearing a hijab conversing in a language he could not understand. He got increasingly agitated – not because they were speaking to him and he couldn’t understand them, but merely because they were having a private conversation in his vicinity in a language he could not understand. Before too long he interjected into their conversation exclaiming: “This is England! Speak English!” The two women ceased their conversation and looked at the man, but did not themselves respond. Instead another person (middle-aged Welsh) retorted: “This is Wales. They’re speaking Welsh.”

                This is a funny story that illustrates a good point. The man being agitated at Welsh being spoken in Wales is clearly a buffoon (at least in the 21st century he is, in the 19th he’d just be an Englishman). Suppose they were not speaking Welsh in Wales, but speaking Arabic in England. Does that make it more appropriate for the man to be agitated by a private conversation in the non-dominant language? The man is taking offense to something that does not involve him in the slightest. The private conversation (which does not involve him in any way except by proximity) would not annoy him if he could not hear it. No, he is merely agitated by the presence of these “foreigners.” Clearly more immigration could exacerbate this “problem” because there would be more people speaking a foreign language in the presence of “native” English.

                This is where the moral kicks in. To the extent that ethic and racial animosity is caused by people reacting to foreigners negatively simply because they dress different, speak different, cook different, worship in a different way, or have a different color skin, those people reacting that way are wrong. This is an axiomatic moral absolute for me. And so if we disagree on this axiom then we will just have to disagree, because I only use this geometry.

                That said, are there ways governments can encourage immigration and also alleviate this human tendency to recoil from that which is not of thine own tribe? Probably. Integrated education and social programs (not just government programs, hell maybe local pubs should meet thy neighbour events) could certainly help.

                All analogies are imperfect, so this one must be as well, but I think it provides some real value: there was another time in the United States when the culture seemed to be moving toward “more ethnic and racial animosity, not less”: the civil rights movements of the mid-20th century. Since, I also take it as axiomatic that segregation, Jim Crow, etc. were morally, absolutely wrong. I think that the Civil Rights Act was the morally correct course for the government to take. The argument “but it will increase racial animosity and violence” is not a valid counter-argument. Going even further back, ending slavery was the ONLY morally correct course to take. You might say that attempts to do that by the government to do that were likely to increase violence. But those who went to war to defend slavery were in the WRONG, 100% absolutely morally wrong. So the only correct course was to abolish slavery.

                Those are of course imperfect analogies for the immigration question. And I’m sure you could offer good examples to cloud and confuse my stance. For instance, you could ask me whether I think Japan is morally incorrect to have such strict limits on immigration because of that cultures general antipathy towards non-Japanese cultures. I would probably respond that I am not Japanese, so I can only speak from the perspective of the culture of which I am a member.

                As for the editorial link you provided, I did not read that as a man “expressing animosity towards the West.” The author has some good points regarding the sins of Empire, though I do not know that the migration is the sole remedy. Do you disagree that Western European, American, (and Japanese!) imperialism had significant negative consequences for the lands and cultures they invaded and exploited? Or do you simply believe that the past is the past, and we in the West owe nothing, not even an apology, to the descendants of the people whose past exploitation is a major reason why we get to live in such a wealthy culture?

              • Martha (Smith) says:

                Terry said,

                “Some immigrants are quite hostile to the natives. This gentleman was given a platform by the NYT to express his animosity towards the west.

                There is a lot of debate these days about whether the United States owes its African-American citizens reparations for slavery. It does. But there is a far bigger bill that the United States and Europe have run up: what they owe to other countries for their colonial adventures, for the wars they imposed on them, for the inequality they have built into the world order, for the excess carbon they have dumped into the atmosphere.”

                I don’t see the quote from the NYT as being hostile or expressing animosity. It’s definitely bringing up things that are unpleasant to hear, but that doesn’t mean it’s hostile or shows animosity.

              • Terry says:

                More Noise, Please:

                Thanks for the thoughtful reply. I appreciate the honesty.

                We agree on much. Tribalism causes many problems. Animosity based solely on ethnicity, etc. is bad. There is a human tendency to recoil from that which is not of thine own tribe. Slavery was bad and had to be ended.

                I particularly agree with the tribalism sentiments. Indeed, tribalism is at the heart of the issue. I used to be sanguine that tribalism would die out rather quickly. I used to be insouciant about immigration too. But the past few years have made me wonder if tribalism is more intractable than I had thought and whether immoderate immigration might increase tribalism.

                I honestly have no idea how this will play out, but it seems like a serious concern and should be considered. Tribal frictions have caused many problems in many places. European colonialists have been excoriated for drawing country boundaries that ignored tribal boundaries caused long-term conflicts by shoving different tribes together (Sudan e.g.). This is a recognition that tribal conflicts within a country can be very serious. On the other hand, some tribal conflicts eventually go away. Ireland is much more peaceful now … after a hundred years or so of bitter conflict. Wealth also seems to smooth over a lot of frictions.

                Your story about speaking Welsh is perceptive. Language divisiveness can be particularly intractable. Belgium, Canada, and Switzerland have had to contend with serious language divisions.

                About the NYT editorial, I agree that many people have done many horrible things to many people. There is plenty of material for tribalists to work with. Even when there isn’t, grievances can be created as needed. I suspect, though, that the more bitter the grievance, the more intractable the tribalism. Yugoslavia did not turn out well.

                You seem to feel a strong pull to move towards moral ground you are more comfortable on, racism, etc. Don’t be mean to foreigners. Don’t dislike foreigners. But this particular question is narrower and much more empirical: will large scale immigration increase tribalism and if so, by how much? You can address the moral aspect later, but first you need to address the empirical issue.

              • Anonymous says:

                Quote from “More Noise, Please”: “I take it as axiomatic that the person that feels animosity towards another person solely on the basis of cultural, ethnic or racial differences is the person in the wrong”

                I think i understand, and agree with, the ethnic or racial differences part of your sentence but i am not sure about the “cultural” part.

                I never understand what exactly is meant by “culture” or “cultural”. Regardless, i wonder if you could say that, for instance, colonialism was sort of a “cultural” thing in parts of Europe during a specific time period.

                If this can be seen as a “cultural” thing, 1) i wonder how does this relates to your quoted sentence above, and 2) i wonder if it can be perfectly “valid” (in some ways at least) to feel animosity towards a person solely on the basis of “cultural” differences (e.g. when that “culture” condoned, and included, colonialism).

              • Martha (Smith) says:

                Anonymous said (responding to MNP):

                “I think i understand, and agree with, the ethnic or racial differences part of your sentence but i am not sure about the “cultural” part.

                I never understand what exactly is meant by “culture” or “cultural”. Regardless, i wonder if you could say that, for instance, colonialism was sort of a “cultural” thing in parts of Europe during a specific time period.

                If this can be seen as a “cultural” thing, 1) i wonder how does this relates to your quoted sentence above, and 2) i wonder if it can be perfectly “valid” (in some ways at least) to feel animosity towards a person solely on the basis of “cultural” differences (e.g. when that “culture” condoned, and included, colonialism).”

                Another problem here: What is the difference between ethnic and cultural? I tried looking it up on the web. One site says,

                “Ethnicity is the term for the culture of people in a given geographic region, including their language, heritage, religion and customs. To be a member of an ethnic group is to conform to some or all of those practices.”

                Another says,
                “Culture is something we’re taught by other human beings. That’s how we learn culture, and generally speaking by elders. People who are older than us, that are passing something down, generation to generation. Ethnicity has to do with nationality. Where we come from, so I might be .. someone is Asian, but their different ethnicities would be a Korean person, a Chinese person, a Filipino person. All Asian, but different ethnicities”

                A third, at https://onlinelibrary.wiley.com/doi/abs/10.1002/9781118663202.wberen578
                has the abstract
                “The opposition between ethnicity and culture is a question of importance for scholars and practitioners, and deserves attention because the two concepts are frequently conflated and confused in both popular and academic discourse, where they are often used interchangeably as markers of distinctive social groups. It has been argued that both terms have come to be used too loosely, as euphemisms for “race.” Culture is often presented as an intrinsic part of ethnicity, one of the uniquely defining features of a self‐ascribed ethnic group. Yet closer attention shows important distinctions between these concepts, which we must acknowledge as cultural constructs in themselves. The differences between ethnicity and culture have important practical consequences in a globalized world, where states and societies have to find ways to live as ever more diverse communities. Both ethnicity and culture raise questions about how we define boundaries between groups and between subgroups within cultures.”

                So the words/concepts seem not to be uniquely defined. It might be interesting if MNP gave their definition of these two terms.

              • More Noise, Please says:

                Terry:

                Regarding “But this particular question is narrower and much more empirical: will large scale immigration increase tribalism and if so, by how much?” I think the question is somewhat ill-posed (not that I am criticizing you by saying that, I just think it’s a hard subject to measure).

                We have seen in history that large-scale immigration can decrease (some aspects of) tribalism. A crude and not useful analogy: when European immigrants killed off large numbers of literal tribes in the Americas that certainly reduce intertribal conflict.

                To treat your question more seriously: I don’t think the two are necessarily directly related or that they can be studied as part of a binary system. In fact I think the article that spawned this conversation shows how that can be the case. Please suspend any disbelief you might have for a moment to consider this theory: suppose that the animus in the “native” group actually arises from economic issues (e.g. austerity as in the article, or in the American case something like rising income inequality and wage stagnation for middle and lower-middle class) and that these changes happen to coincide with rising immigration. If that animus is redirected (either through a natural human tendency to initially distrust the unfamiliar or through active means by the powers of persuasion by media and political forces) towards immigrants, is it fair to then blame the increasing tribalism and tensions between groups on immigration?

                Human societies are incredibly complex. We could probably contrive a situation in which we can have large-scale immigration without much in the way of increased tribalism. Canada is perhaps a good example. They have actually been increasing the number of immigrants including refugees over that last few years with further plans to increase. These increases were specifically motivated by economic concerns (see The Globe and Mail, Nov 1, 2017: “Canada aims for immigration boost to buttress economy as population ages”) If you believe this poll (suspend you disbelief as necessary) by Ekos Research (http://www.ekospolitics.com/index.php/2019/04/increased-polarization-on-attitudes-to-immigration-reshaping-the-political-landscape-in-canada/) 40% of Canadians think there are too many immigrants a number essentially unchanged since 2005, and down from 50% in the 90s.

                Separately, Anonymous: I think culture is or can be aspect of ethnicity, but I admit there in imprecision in my and a global use of these terms. I think ethnicity has more of a connotation of biological heritage whereas culture is purely a learned trait. For example, a Korean baby adopted and raised by an Italian family may self-identify culturally as Italian, whereas other Italians may see them as non-Italian based on their appearance. If that grown baby then immigrates to a third country they could encounter two types of animosity: “I don’t like this person because they appear Asian” or “I don’t like this person, because I don’t like Italian food.”

                Regarding imperialism as an aspect of culture, I will amend my definition to make it more clear my leanings toward social (but not economic!) libertarianism: so long as what you’re doing does not harm others, you should be free to do it. If your culture involves you shaving your eyebrows and gluing google-eyes to your nostrils, then you know what, good for you. I can’t take offense to that cause it doesn’t affect me. But if your culture requires you to sacrifice a stranger’s pinky toe in ritual sacrifice to your gods every other Thursday, then I would have a problem with that.

                That said, that’s a heuristic not a law. I’m sure you could find corner cases and semi-pathological examples to challenge me.

          • Bob says:

            Point 1:
            OK, Take the BNP as far right. How much electoral success have they had? Do they exist as an electoral force? The British electorate have ‘gone for the far right’, with no benefit for the longest standing far right party?

            Point 2:
            You said you are “willing to say that UKIP of 2014 (because UKIP of 2018 – 2019 is DEFINITELY a far-right party), was somewhere between the Conservative party and the BNP”.

            OK, so UKIP 2019 is a far right party, and the British electorate has ‘gone for the far right’ remember? How did they do in the EU elections with this massive shift towards them? They got wiped out.
            Hey wait a minute, that’s good news right?

            Point 3:
            Where did the ‘far right’ votes go? Impossible to say exactly, but there’s a large correspondence between the UKIP vote in the previous EU election and the Brexit party in the most recent one. Let’s say then it’s broadly the same group of voters.

            But why desert UKIP if they’ve become even more ‘far right’? That makes no sense under this explanation.

            On the other hand, a party which was only weeks old pulled in those votes on a single platform of leaving the EU. They had no other policies, no manifesto, and given the broad range of people standing for them I doubt they could agree on anything else anyway.

            They had one policy, to leave the EU. Now, someone may not like that policy but it was the referendum result and the majority view, and that view has held up for three years despite considerable opposition and despite countless ‘polls’ saying that the electorate had changed their minds.

            That’s why they got the votes and that’s why Farage is a force. If the vote had been implemented then Farage becomes irrelevant. He’s not some Nazi pied piper who can bend the electorate to his will, he harvests the votes of the majority because he is in alignment with them on this issue.

            Opposing mass uncontrolled immigration does not make one far right, in fact it was the dominant white liberal view in the US in the 1990s. Opposing gay marriage does not make one far right, it is the standard Christian view, the standard Muslim view also. Was Obama standing on a far right platform when he opposed it in 2008?

            Concocting this narrative may be comforting to some people, though I’m surprised to see it on a blog that addresses these cognitive and statistical biases.

  2. Eric says:

    There is another limitation to the study: austerity was imposed on a national level, so by comparing communities more or less affected by austerity, Fetzer is comparing ‘austerity as it was’ to ‘austerity as politicians hoped it would be.’ In the absence of austerity, the economic conditions that led to it would have been addressed in some other way. We have no data on how the economic policy that was not chosen would have affected the leave vote.

    • Thiemo says:

      Hey Eric,

      if you read the paper all aggregate evidence is also backed up with individual-level panel analysis (i.e. exploiting within individual variation over time).

      Best Thiemo

  3. Michael Nelson says:

    The author tells a reasonable-sounding story and supports it with imperfect evidence. Others may (and should) come up with alternative stories and whatever supporting evidence they can find. The body of evidence builds, and economists, political scientists, historians and the like can make their own judgments. All in all, a much better system than comparing p-values!

  4. Piero says:

    Overall I find this paper a good example of how one can work on a problem like this, i.e., there’s no silver bullet or magic path to “clean identification” but a lot of different pieces of evidence make the argument overall credible. (And as an aside, I see this as a complementary rather than an alternative explanation wrt our story about economic decline driven by globalization. We had some evidence regarding an interactive effect between the globalization shock and fiscal cuts, but our measure of the latter was cruder than those used by Fetzer.) As for the point Andrew raises, it is true that one cannot exclude that everything is driven by heterogeneity in the time trends across places that simply happen to be hit by austerity (or by globalization) to different extents. Been thinking about this for a while and came to the conclusion that after all this is a concern one can mitigate via ancillary evidence but never really exclude completely. I am not sure I understand the second explanation. Do you mean that cuts mattered at the national level but voters in areas more reliant on the welfare state were more sensitive to them?

    • Thiemo says:

      True and well said Piero — I agree that the papers are complementary — except that the results in my paper go beyond the mechanism studied by Piero and Italo. In fact, as I show on https://www.dropbox.com/s/nqnvpbhy82ofg8e/bocconi.pdf?dl=0 on Slide 71 in a seminar I gave at Bocconi last year, Italo’s and Piero’s import competition instrument is positively related with a steady expansion in the demand for benefits available to people squeezed out of the labor market.

      Yet this comes to a halt form 2010 as the coalition government imposed austerity.

      While for the historic manufacturing-sector heavy regions the trade-induced decline is an important part of the story, that however, interacts with the welfare reforms that hit exactly those globalization losers disproportionately. Another important part of the story is the retail sector decline, which was massively sped up by the welfare cuts taking out billions out of regional economies, contributing to massively widening regional inequalities.

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