Status of US citizens influences economic aid to Mexico/Asia

06/01/05

A new study publishing in the latest issue of American Journal of Political Science looks at the voting history of the Congress to find that members are significantly more likely to favor financial rescues to Mexico and several Asian economies if they have a higher proportion of high-skilled workers in their district. Conversely, a higher number of low-skilled workers led to members opposing monetary help. The author, J. Lawrence Broz, finds that the politics of rescue are in character with the politics of economic globalization. "The inference is that legislators oppose (support) financial rescues because constituents are harmed (gain) by economic globalization," he explains.

Broz measured constituent skill levels by the percentage of the district age 25 years and older with a four-year college degree or higher and the percentage of those of working age employed in executive, administrative, managerial, and professional occupations. He then analyzed House roll-call voting on three bills proposed to restrict Exchange Stabilization Fund (ESF) rescues. In terms of every-day policy-making the ESF is self-financed and independent of Congress, but the latter can modify and restrict the range of action via new legislation. The ESF has a large impact as its policies affect the pace and extent of economic globalization, which creates winners and losers in the private sector. For example, low-skilled workers face a large threat. As American factories move to other countries, capital leaves the United States and the need for and salary of low-skilled laborers in the US decreases. "Members that oppose rescues have constituents that lose from globalization and are therefore less concerned with global economic stability," the author concludes.

Source: Eurekalert & others

Last reviewed: By John M. Grohol, Psy.D. on 21 Feb 2009
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