Space, money and politics

Written by Mark Briggs on . Posted in Current profiles, Profiles

ClementClément Malgouyres is a third year researcher in the Department of Economics. His work looks at how global trade affects local economies, and how that in turn changes the political dimension of the area.

Globalisation has become an increasingly dominant force. But who are the winners and losers, and what effect does that have on local regions? According to Malgouyres when an area opens up to trade the gains are equally distributed throughout the society: “You have the opportunity to buy cheaper consumer products and roughly your gains as a consumer will be pretty similar.”

What is not shared equally, however, is the risk.

“If you happen to be working in a sector that overlaps with a strong specialisation of a country to which you are opening up, your lifetime income is likely to be heavily impacted.”

What is true for individuals also counts for companies, industries, cities, and with industries often clustered in particular regions.

Today, such competition usually takes the form of tradable goods from low wage countries such as China. Companies and jobs follow the path of increasing returns. People, however, in the parlance of economics are “imperfectly mobile across space”.  If you live in an area and lose your job you are likely to look for another job in the same place rather than move.

This has ramifications for those who were not in direct competition with new imports; a local decrease in demand, and increased competition for jobs from those who are now redundant pushes wages down and feeds into local decline.

“I wanted to try and quantify those effects and look at the direct and indirect effects of import competition. In particular I’m looking at if people in affected cities radicalise. Do they vote more for radical parties?”

Using French data, Malgouyres is currently looking for empirical evidence for a shift towards far right voting. Initial findings suggest the effect is more prominent in European Elections, and has been growing in magnitude over the period of study 1995-2012.

However in presidential elections, the effect is not as positively correlated: “I am worried it captures more sociological effects. People with working class backgrounds vote more for the far right and have been doing so increasingly. It is not isolated to those in overlapping sectors.”

Malgouyres’ Masters thesis looked at how access to the labour market varied from place to place, and whether financial assistance is best aimed at individuals or regions. Capital and individuals are important, but in economics “space matters.”

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