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Summary of Hiscox: Inter-industry factor mobility and the politics of trade - From WikiSummary, free summaries of academic books and articles


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Hiscox. 2001. Inter-industry factor mobility and the politics of trade. International
Organization 55 (winter): 1-46.
"... I apply the standard economic theory of trade to highlight the importance of interindustry factor mobility--that is, the ease with which owners of factors of production (land,
labor, and capital) can move between industries in the domestic economy. If factors are
mobile between industries, the income effects of trade divide individuals along class lines,
setting owners of different factors (such as labor and capital) at odds with each other
regardless of the industry in which they are employed. If factors are immobile between
industries, the effects of trade divide individuals along industry lines, setting owners of the
same factor in different industries (labor in the steel and aircraft industries, for example) at
odds with each other over policy." (page 2)
Main argument involves asset specificty (X): If my factors (capital or labor training) are
immobile, than a sudden increase in trade increases the competition I face, but I can't leave
my industry. E.g.: Steel mills. Owners and workers of steel mills both favor protection. But if
factors are mobile, than a sudden increase in trade isn't a big deal; even if my industry is
threatened, I can just leave it and do something new.
High factor mobility --> class alliances
Low factor mobility --> industry sector alliances
Rogowski (1987) argued that changing exposure to trade could affect domestic political
coalitions. His result was based on the Samuel-Stolperson theorem which says that
increased trade benefits holders of abundant resources and hurts holders of scarce
resources. This argument assumes perfect factor mobility (i.e. a factor like steel is perfectly
mobile between industries). Thus, Rogowski concluded that political coalitions for/against
trade would form along a rural-urban or class-based cleavage depending on a state's relative
abundance of land, labor, and capital. There's a competing economic theorem, though. The
Ricardo-Viner model assumes perfect factor IMmobility, which changes the results: owners
of factors tied to export industries will benefit from expanded trade. Under this theorem,
you would never expect rural-urban or class-based political cleavages to form around trade
issues; you would expect industry-based cleavages.



Summary of Hiscox: Inter-industry factor mobility and the politics of trade - From WikiSummary, free summaries of academic books and articles

Hiscox's main contribution is to tie the two theories together, using factor mobility as the
main independent variable. "Allowing that factors can have varying degrees of mobility, the
simple prediction is that broad class-based political coalitions are more likely where factor
mobility is high, whereas narrow industrybased coalitions are more likely where mobility is
low" (page 4).
Lots of discussion of this. I understood the entire theory from the first four or five pages.
Thirty or forty pages of evidence followed, with detailed analyses of several countries (US,
UK, France, Sweden, etc.) included.
Of course he's right. He acknowledges several variables that he has not considered, as well as
some important assumptions he made that could change the results if relaxed (e.g. no
international factor mobility). Also, he recognizes that political regulation of the economy
affects factor mobility, which suggests a possible endogeneity/reverse causation problem.

The following summaries link (or linked) to this one:
Rogowski: Political cleavages and changing exposure to trade

Keywords: Authors/Hiscox, Michael - Political Science - International Relations Trade - Social Cleavages - Class Conflict - Preferences

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Summary of Hiscox: Inter-industry factor mobility and the politics of trade - From WikiSummary, free summaries of academic books and articles

What is Wikisum? As a graduate student several years ago, my friends and I would routinely share our reading notes with one another.
We all read each article, but we shared the onerous responsibility of summarizing our readings. I collected many of these summaries
and imported them into this wiki, hoping it would take off and attract hordes of graduate students and political scientists interested in
maintaining an up-to-date knowledge base of all political science has to offer. It turns out I was too optimistic, though. Hundreds of
people read the summaries, but almost nobody contributed new ones. Eventually, I turned the wiki into a static (non-editable) website.
The summaries are still useful, so they're still here, but the name "wikisum" has become a bit of a misnomer. Regardless, we have
discussion here of presidential campaigns, Congressional behavior, Republicans, Democrats, political scandals, war, voting, survey
methods, and political research on a variety of other topics. Enjoy.
Bored? Alphabetically, these are the previous and next summaries:
Hibbs: Political parties and macroeconomic policy
Hicken: Engineering aggregation
Hillygus and Jackman: Voter decision making in election 2000
Hiscox: Inter-industry factor mobility and the politics of trade
Hochschild: What's fair
Hogan: The costs of representation in state legislatures
Holbrook, Krosnick, Visser, and Gardner: Attitudes toward presidential candidates