4623814_globalization and perceptions of policy maker competence evidence from france

University of Utah

Globalization and Perceptions of Policy Maker Competence: Evidence from FranceAuthor(s): Timothy HellwigSource: Political Research Quarterly, Vol. 60, No. 1 (Mar., 2007), pp. 146-158Published by: Sage Publications, Inc. on behalf of the University of UtahStable URL: http://www.jstor.org/stable/4623814 .Accessed: 10/01/2011 03:53

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Globalization and Perceptions of Policy Maker Competence Evidence from France

Timothy Hellwig University of Houston, Texas

Does globalization affect perceptions of policy maker competence? Despite considerable attention to connections between globalization and policy efficacy, no research explores connections between the world economy and confidence in politicians. This article makes three novel arguments. First, by constraining administrative control over policy outcomes, economic globalization reduces levels of public confidence in national executives. Second, by signaling a more complex policy-making environment, exposure to world markets increases the volatility of policy maker evaluations. And third, economic openness affects public preferences over policy by shifting policy demands-away from domains constrained by market liberalization and toward areas where national autonomy remains strong. Time-series analyses of public opinion data from France support research expectations. As the first study to link economic globalization to policy perceptions, this article finds that the political consequences of engaging the global economy are more numerous than previously implied.

Keywords: globalization; public confidence; policy demands; time-series methods; France

Political Research Quarterly Volume 60 Number 1 March2007 146-158

? 2007 University of Utah 10.1177/1065912906298814

http://prq.sagepub.com hosted at

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It is clear to voters that the globalized economy is steered not by politicians, but by banks, man- agers, and uncontrolled markets.

-Dick Morrist

The present era, it is often said, is defined by globalization. Accordingly, many scholars have debated the consequences of the international integration of markets for goods, services, and capital. Debates often are framed by questions of policy competency. Some contend that world markets tie the hands of national policy makers as attempts to pursue autonomous strategies will be undercut by market actors not held accountable to national electorates (e.g., Andrews 1994; Mishra 1999; Moses 2000; Strange 1996; see also Korpi and Palme 2003). Others, skeptical of this "globalization thesis," claim that engagement in world markets has little effect on domestic policy autonomy. Rather, by increasing the pressure on politicians to respond to dislocations, market openness may facilitate government responsiveness (Garrett 1998; Hall and Soskice 2001; Hicks and Zorn 2005; Swank 2002). Neither perspective, however, con- fronts the effects of globalization on the public's atti- tudes toward their policy makers. As a consequence, fundamental questions about the relationship between

market interdependence and perceptions of democratic performance have been ignored. While studies examine the effects of the international economy on mass political behavior (Burden and Mughan 2003; Hellwig 2001; Hellwig and Samuels forthcoming; Scheve and Slaughter 2004), none investigates how worldwide market activity affects perceptions of policy efficacy, policy maker competency, or what voters demand from their representatives.

This article provides the first investigation of the relationship between economic globalization and public perceptions of national policy efficacy. Does exposure to the world economy affect public confidence in national politicians? What is the relationship between globalization and public demands for policy responses? Does globalization give the public cause to question whether national leaders are in control?

Author's Note: Parts of this research were presented at the 2004 Duke Summer Institute on the Politics of Globalization and Equity, Durham, NC. For comments and helpful discussions, I thank Brian Burgoon, Suzie De Boef, Nate Jensen, Robert Keohane, Layna Mosley, Matt Slaughter, and the anonymous reviewers. Support from the National Science Foundation (SES- 0241824) is gratefully acknowledged. Statistical analyses were performed using STATA 9.0 and RATS 5.0. Any remaining errors remain my own.

146

Hellwig / Globalization and Policy Maker Competence 147

Or does it facilitate responsive policy making and improve the standing of elected leaders?

Insomuch as they address important issues of popular sovereignty and policy responsiveness, these questions deserve our attention. To investigate these questions, this article develops and empirically tests three arguments. First, taking issue with claims made by globalization skeptics, I argue that economic openness has an adverse effect on perceptions of policy efficacy. Second, by creating a more complex political- economic environment, I assert that globalization compromises the public's ability to assign responsibility for policy outcomes and leads to greater volatility in policy maker evaluations. And third, I suggest that globalization shapes public demands for policy responses: as the dependence of national economies on world markets increases, rational citizens will redirect requests for policy action away from issue domains where this dependence has a direct bearing on policy efficacy and towards areas where it does not.

As evidence, I employ previously unexamined French public opinion and economic data from 1985 to 2002. With a tradition-and continued public expectations-of government intervention in economic and social affairs, France is a good example for examining how exogenous constraints limit the influence of governments in advanced industrial democracies. For most of the postwar era, the French economy was characterized by protectionism and tight control on capital movements. Over the past two decades, however, it has experienced privatization, deregulation, and market liberalization. And although several studies address the effects of these developments on French politics and society (Berger 2002; Culpepper, Hall, and Palier 2006; Gordon and Meunier 2001; Meunier 2004; Spitz 2002), none empirically tests the linkage between globalization and the political perceptions of the electorate. Therefore, in addition to extending globalization research to consider public perceptions, this article also advances research on the consequences of economic change in France.

In the next section, I draw on developments in public opinion research to develop an argument for how globalization matters for how citizens evaluate their policy makers. I then introduce the data and present two sets of analyses, one for the determinants of policy maker confidence and one for the determinants of policy demands. I conclude with implications of studies for research on the international economy and democratic performance.

Policy Maker Confidence and Policy Demands in Exposed Economies

What determines public support for policy makers? Mass sentiment for political elites may be influ- enced by several factors, including socioeconomic background, partisan filters, and positions on the issues of the day. Regarding political issues, research has found-among other things-that popular support depends not only on the party's positions on the issues but on whether it has the capacity to execute its program. Issue-ownership theories of political competition claim that parties attract voters by emphasizing issue areas where they are believed to be competent (B6langer and Meguid 2005; Budge and Farlie 1983; Petrocik 1996).2 Others contend that policy maker competence affects the salience of the economy for political support. In the model proposed by Alesina, Londregan, and Rosenthal (1993), voters must solve a signal extraction problem. While individuals can observe the state of the economy, they must rely on signals from policy makers to determine what share of observed economic performance is due to the management competence of elected officials and what share is due to shocks beyond their control (see also Duch and Stevenson 2006; Hibbs 1982).

Ownership theories of issue voting and signaling models of retrospective voting point to a similar conclusion: Popular confidence in politicians is dependent on their ability to build and maintain a reputation for policy competence. In self-contained political economies with clear lines of responsibility for policy outcomes, it is relatively easy for the citizen to gauge policy competence.3 But how does globalization affect collective opinion about national policy makers? Building on developments in voting behavior and public opinion research, I make three arguments.

First, I argue that economic globalization should affect public confidence levels in their policy makers' ability to solve problems. All else equal, citizens pre- fer policy makers who demonstrate competence on the issues to their less competent alternatives.

Theories of issue ownership and management competence alike operate under the assumption that competency matters insomuch as it separates politicians who have greater ability to execute policy from those with less, thereby sharpening the lines of political competition. What matters, then, is the competence of one group of elites in control of policy levers relative to that of the alternative. But what if neither alternative

148 Political Research Quarterly

has the capacity to affect real outcomes? This is the case in political economies heavily exposed to international markets. Economic openness reduces the share of economic activity occurring within state borders. By doing so, openness moderates the capacity of political elites to manage economic performance outcomes, to take credible positions on issues related to the economy and, as a consequence, to signal their competence to the public.

It should come as no surprise, therefore, to hear politicians draw connections between globalization and the credibility of their policy-based appeals. This has certainly been true in France. Observed a former Socialist government minister, "Because of decisions made in Brussels and at the WTO, the French don't have confidence. ... [They] have doubts in the ability of national policies to solve problems." A member of the Center-Right Union for a Popular Movement (UMP) concurred: "Governments of all countries of the world are bound by the global situation-the economy is stronger than politics." "Thirty years ago," added a government advisor on finance, "the

government had an influence on policy. Today, the room to maneuver has narrowed, evidentially due to globalization."4 This brings us to the first research hypothesis: Exposure to the world economy reduces public confidence in national policy makers.

Second, in addition to affecting the level of public confidence, I contend that globalization affects the volatility of confidence as well. The motivation for this claim comes from what we know about the role of information in political decision making. Most would agree that, deterred by the high costs of gathering information, political evaluations are always made with uncertainty.5 When deciding whether politicians deserve their trust and confidence, citizens choose to be "rationally ignorant," employing only a handful of readily accessible indicators, such as the state of their own material well-being. This notion of the minimally informed citizen is consistent with studies that model some measure of collective support for elites as a function of some macrodata. The micro processes underlying macro-models assume that economic indicators-such as unemployment, inflation, or business confidence- are good predictors of policy maker evaluations insomuch as they are easily observed and have a bearing on personal welfare. Competent policy making is therefore signaled to the public through a healthy macroeconomy, which, in turn, improves the welfare of the individual citizen.

This widely subscribed model of policy maker confidence depends on two assumptions: (1) that individuals

can infer personal welfare from aggregate indicators and (2) that the performance of the national political economy- however measured-is concentrated in the hands of elected officials. Both assumptions may be credible in closed economies. This almost certainly is not the case, however, for economies heavily exposed to international competition. First, under globalization, the performance of the national economy may only mar- ginally affect personal welfare. Instead, foreign- denominated assets, fluctuations in currency prices, and the relocation of production centers all may have non- trivial welfare effects-effects not directly related to national economic indicators. And second, exposure to world markets signals that control over performance outcomes is diffuse, causing citizens to be uncertain if policy outcomes are driven by choices made by elected leaders or, rather, by multinational corporations and other global market actors. Manin, Przeworski, and Stokes (1999) described this situation:

Suppose that there is something that people do not know, perhaps because only the government can observe it (e.g., the negotiating posture of foreign governments or international financial institutions) or because the information is costly to obtain (e.g., the level of demand in the major recipients of the country's exports). If people are not certain about exogenous conditions or about the effect of policies on outcomes, then they cannot be sure which policies are in their best interest or how much they can expect from the government. (pp. 10-11)

Put in the language of competency models, globalization makes the signal extraction problem more dif- ficult as the noise between policy maker decisions and performance outcomes increases.

The implication is that globalization negatively affects the public's ability to make informed evaluations of their policy makers. Being rationally ignorant is no longer sufficient for making policy maker evaluations. More information is necessary-information many individuals will find too costly to obtain. In the aggregate, individual uncertainty over how to evaluate national policy makers should increase the volatility of perceptions of policy maker confidence. This is our second hypothesis: Exposure to the international economy increases the volatility of public confidence in national policy makers.6

If globalization affects how the public evaluates policy makers, then it should also influence collective preferences for policy responses. Empirical studies of


representation have shown that policy makers respond to the preferences of the electorate. Representatives receive policy signals from the public and respond when mass policy preferences change (Stimson, MacKuen, and Erikson 1995), and preferences for "more" or "less"

policy depend on current levels of government response (Wlezien 1995). While most have studied the American case, recent works find support for dynamic representation in other contexts as well (Hobolt and Klemmemsen 2005; Soroka and Wlezien 2005). The conclusion from these studies is reassuring: the supply of policy from political elites is, at least partially, shaped by public demands.

Research on representation, however, stops short of asking whether the public believes politicians to be competent to supply policies in the first place. If, per hypothesis 1, globalization affects the public's faith in their representatives' ability to supply policy solutions, then it may also influence the nature of public policy demands. Specifically, I argue that by signaling a reduction in the quantity of policy supplied in a particular policy area, globalization should cause citizens to reduce demands for policy action in that domain. But rather than simply letting politicians off the hook, a rational public should compensate by increasing demands for policy responses in other issue domains-- domains not directly affected by globalization.

To clarify the intuition, consider the supply and demand for policy responses: by constraining the room to maneuver, economic globalization causes the supply curve for policies directly affected by openness to shift to the left. In economies exposed to external market pressures, "less" policy is supplied and-assuming a downward-sloping demand curve-at a higher cost relative to closed economies (i.e., the same quantity of policy outcomes achieved under a closed economy is more expensive in more in exposed economies). Public policy demands, as a consequence, will migrate to other areas. A third hypothesis may be advanced: Exposure to the world economy reduces public demands for policy responses in domains perceived to be directly affected by economic globalization and increases demands in domains where it has little or no effect on the government's capacity to deliver.

The Global Economy and Confidence in French Executives:

Data and Methods

Hypotheses are tested using aggregate French economic and public opinion data from 1985 to 2002. To

examine what moves public confidence, I employ a unique set of surveys on the public's confidence in the president and the prime minister (PM). Dependent variables are constructed from aggregate responses to the question, "Do you have a lot of confidence, some confidence, not much confidence, or no confidence at all in [name of president/ name of PM] to solve the problems facing France today?"' The series used in analysis- one for the president and one for the PM-is the percentage of those responding "a lot" and "some" confidence each month. Unlike the approval series used in opinion studies of the American president, which taps only "a general impression about the way the incumbent seems to be handling his job at the present moment" (Mueller 1970, 18), the French public confidence series focuses the respondent's attention on the executive's capacity to solve problems, making it a more appropriate indicator for examining policy efficacy and responsiveness than more commonly employed measures of aggregate public opinion.8

I regress public confidence on measures of economic openness and a set of controls. I estimate models with both major components of economic globalization, trade and capital flows. Trade Openness is measured using exports plus imports. Capital Flows is the sum of total inflows and outflows of foreign direct and portfolio investment. Both series are stan- dardized as a percentage of GDP. Data are from French National Institute for Statistics and Economic Studies (INSEE) and the IMF's International Financial Statistics.9 Per hypothesis 1, I expect these variables to have a negative influence on public confidence.

Models include controls for the domestic economy and for political events. Political confidence should be affected by economic confidence. I therefore include the monthly consumer confidence indicator from the European Commission's Business and Consumer Survey. The measure is the average of responses to questions about the financial situation of households, the general economic situation, unemployment expectations, and household savings over the next twelve months. Preliminary analyses found, not surprisingly, that consumer confidence explained more model variance than any of its indicators separately. To capture the effects of political events I create a series which measures +1 for months in which an event expected to increase evaluations of the executive occurred, -1 for months in which an event expected decrease these evaluations occurred, and 0 otherwise.

Analyses are performed using single-equation error correction models (ECMs). The ECM specification enables us to test for both the contemporaneous and


long-run multiplier effects of exposure to the global economy on public confidence. There is reason to believe that the effects of the international and domestic economies on public confidence are not (only) contemporaneous, but accumulate over time. Additionally, preliminary analyses indicated that many of the series of interest are strongly autoregressive. Estimates of the fractional differencing parameter, d, indicate that the null hypothesis of a unit root cannot be rejected for the two public confidence series (for the president and for the PM), for consumer confidence, and for capital flows. Furthermore, we cannot reject the null hypothesis that trade openness has a d value of > .5, indicating that it also may be nonstationary.

o The single-equation ECM has been shown to be appropriate in this situation (De Boef 2001; Clarke et al. 2004)."

The model is of the following form:

APUBCONF, = ao+ a PUBCONF,,1 + oAGLOB, + PIGLOBt_ + 2ACONS, + P3CONSt,- + P4EVENTS, + E,, (1)

where PUBCONF = public confidence in the French executive (either the president or PM), GLOB = exposure to the international economy (either Trade Openness or Capital Flows), CONS = consumer confidence, and EVENTS = political events interventions series. The immediate effect of shock to GLOB at time t on PUBCONF is equal to P0 and the long-run multiplier effect is equal to the coefficient on lagged GLOB divided by the coefficient on lagged PUB- CONF multiplied by negative one, or 1/(-a1).12 The speed at which the system returns to its equilibrium following a temporary shock is given by the adjustment coefficient, ao.

The error term, E,, is assumed to be normally dis- tributed with mean zero and variance &a. Modelers usually assume that the variance is constant, that is, that o= = o2 = . = 02 for a model estimated on series with T time periods. However, to test hypotheses 2 on the effect of economic openness on the volatility of collective confidence, I relax this assumption and model the disturbance as a function of exogenous predictors. The variance component is modeled as o = exp(o + Z~y) such that

ot is a func-

tion of a constant, 0, and a vector of exogenous factors, Z, (Harvey 1990).13 I include the globalization measures-trade openness and capital flows-as covariates in the variance equation. Per hypothesis 2, the expectation is that these variables positively influence model variance

(o2/), indicating greater volatil-

ity in perceptions of policy efficacy.

Two additional variables are included in the variance equation as controls. First, French electoral rules have produced periods of divided executive government, or cohabitation, where the president's party dif- fers from the PM's. Research suggests that under unified government the public perceives the president, as leader of the party, to be the policy-relevant incumbent. During cohabitation, the president's influence over policy is displaced by the PM (Lewis-Beck 1997; Conley 2006). This effect can be accommodated in the variance equation: for models with confidence in the president as the dependent variable, I expect the variance during periods of divided government to increase, reflecting more uncertainty with the president as policy maker.14 Conversely, for models with confidence in the PM as dependent variable, cohabitation periods should be characterized by lower variance as partisan differences help the public to evaluate his or her policy proposals independently from those of the president.

Second, the ability of citizens to develop informed evaluations should increase over time as opportuni- ties for the public to judge the executive's policy performance accumulate. To control for policy maker familiarity, I include a variable that measures the fraction of years since the last presidential or (in the case of confidence in the PM) legislative election.

Results

Table 1 reports estimates for models with confidence in the French president as the dependent variable. Model 1 employs Trade Openness as the globalization indicator, and model 2 includes Capital Flows. Per equation (1), the globalization and consumer confidence series are entered into the model both in first differences and in levels lagged one period.

First consider models for the mean of public confidence in the president. For both regressions, estimated coefficients on the differenced series (ATrade Openness, and ACapital Flows,) are impre- cisely estimated, meaning that economic globalization does not have an immediate effect on aggregate public opinion. Exposure to world markets, however, does matter in the long run. Consistent with hypothesis 1, the long-run effects of globalization are negative and statistically significant in both models. In model 1, the -.17 parameter estimate on lagged Trade Openness and the -.18 for the ECM adjustment parameter means that the long run multiplier is

[~/(--) = [-.17/-(-.18)] =

-.96, with standard error .34.'5 For each 1 percent


Table 1 Economic Globalization and Public Confidence

Dependent Variable: APublic Confidence in the President

Model 1 Model 2

Coefficient Standard Error Coefficient Standard Error

Mean equation

Constant 19.08** 4.33 10.49** 2.50 Trade openness

Difference, -0.36 1.57

Level, , -0.17** 0.06

Capital flows

Difference, 0.02 0.41

Level, , -0.08** 0.04 Consumer confidence

Difference, 0.23* 0.09 0.20* 0.11

Level,, 0.18** 0.05 0.13** 0.05 Error correction model (ECM) adjustmentt

-0.18** 0.04 -0.15** 0.04 Political events, 1.93** 0.75 1.77** 0.73

Variance equation

Constant 0.34 1.19 3.13** 0.13 Trade openness, 0.07** 0.03

Capital flows, 0.01 0.02

Cohabitation, 1986-1988 0.45 0.39 0.20 0.36 1993-1995 -0.02 0.37 0.37 0.41 1997-2002 -0.30 0.42 0.37 0.47

Time since presidential election, -0.17** 0.06 -0.21** 0.06 Wald test 39.44** 31.85**

Ljung-Box Q 2.28 1.77

Ljung-Box Q2 0.26 0.06

Note: Series is monthly from March 1985 to December 2002. Cells report maximum likelihood estimates with standard errors. T = 214.

*p < .10. **p < .05 (two-tailed tests).

increase in trade as a share of GDP, aggregate confidence levels in the president decline by about 1 percent. The cumulative effect of a 5 percent increase exposure to international trade-which occurred over the course of 2000-would therefore cause confidence in the president to drop by about 4.8 percent. In model 2, the coefficient on lagged Capital Flows is -.08. The long-run multiplier has a coefficient of -.56[ =

-.08/-(-.15)] with standard error .31. A positive shock to Capital Flows negatively influences the public's faith in the president to solve problems. For example, a 5 percent increase in exposure to international capital markets leads to a cumulative reduction in the public's confidence in the president by nearly 3 percentage points.

The error correction models highlight differences in the dynamic effects of the domestic and international economies. Exposure to the world economy registers only a long-run effect on confidence in the

president. But a shock to consumer confidence has both contemporaneous and long-term consequences. This difference squares with intuitions: while the domestic economy is of greater immediate concern to voters' material interests, with time the economy beyond national borders also shapes evaluations of policy maker control, above and beyond that due to the domestic economy alone.

The bottom half of Table 1 reports results of the variance equations. Consistent with hypothesis 2, coefficients on Trade Openness (model 1) and Capital Flows (model 2) are both positively signed, though only the former attains conventional levels of statistical significance. In both models, cohabitation periods appear to have no effect. Contrary to expectations, cohabitation does not increase model variance, indicating that divided government has no effect on the certainty of mass evaluations of the president as policy maker. Presidential tenure, however,


Table 2 Economic Globalization and Public Confidence Dependent Variable:

APublic Confidence in the Prime Minister

Model 3 Model 4

Coefficient Standard Error Coefficient Standard Error

Mean equation

Constant 15.80** 5.10 12.71** 3.59 Trade openness

Difference, -0.75 1.96

Level,_, -0.08 0.07

Capital flows

Difference, 0.29 0.43

Level,_, -0.06 0.05

Consumer confidence

Difference, 0.35** 0.15 0.30* 0.16

Level,_, 0.18** 0.07 0.18** 0.07

Error correction model (ECM) adjustment,_

-0.17** 0.05 -0.17** 0.05 Political events, 2.06* 0.87 2.03** 0.82

Variance equation

Constant 0.39 1.17 3.48** 0.28 Trade openness, 0.08** 0.03 Capital flows, 0.05** 0.02 Cohabitation,

1986-1988 -0.13 0.46 -0.69** 0.33 1993-1995 0.43 0.28 0.23 0.20 1997-2002 -2.09** 0.40 -1.91** 0.44

Time since legislative election, -0.06 0.07 -0.11** 0.05 Wald statistic 29.16** 26.98** Ljung-Box Q 0.23 0.22 Ljung-Box Q2 0.43 0.70

Note: Series is monthly from March 1985 to December 2002. Cells report maximum likelihood estimates with standard errors. T= 214. *p < .10. **p < .05 (two-tailed tests).

does affect model variance. In both models the variance declines as the president's time in office pro- gresses, suggesting that familiarity helps the public clarify policy assessments.

Table 2 replicates the analysis using public confidence in the PM as the dependent variable. Mean models show that economic openness has no significant effect on confidence levels, either contempora- neously or over the long run. But this does not mean that exposure to global markets has no effect on prime ministerial confidence. Variance equations show that both trade and financial market integration have positive and statistically significant effects. This supports hypothesis 2: economic openness increases the volatility of aggregate public confidence in the French PM. Moreover, additional analyses indicate that the apparent lack of support for hypothesis 1 on mean confidence may be masked by whether or not the PM and president belong to the same party. The

effects of globalization might matter more for PM confidence when the cohabitation designates the PM as the executive responsible for policy outcomes rather than the president (see Lewis-Beck 1997). Accordingly, I reestimated models 3 and 4 only on data from the 1997 to 2002 cohabitation period-the longest of the three periods of divided executive rule, lasting 59 months. Estimates show that trade exposure has a negative and statistically significant effect on PM confidence. The long-run multiplier for Trade Openness is -1.73 with a standard error of 0.52. Results of these additional model runs are available on request.

Table 2 also shows that the effect of domestic factors on PM confidence is considerable. In fact, a com- parison across tables shows that consumer confidence has a stronger effect (on the order of about 50 percent) on the PM's confidence levels than on those of the president. This confirms conventional


notions regarding the division of powers within the French dual executive, where the PM oversees matters of domestic economic policy and the president represents the Republic as head of state. Finally, results show that the variance about mean evaluations was smaller during the 1986 to 1988 and (especially) 1997 to 2002 cohabitation periods. At least some of the time, the public is more certain in its evaluations of the PM's policy effectiveness when the premier can draw on partisan differences to separate his or her policies from those of the president.16

Overall, these results provide solid support for research expectations. Unsurprisingly, the public's confidence in the president is affected by perceptions of the national economy. Connections between policy maker evaluations and integration with the world

economy, however, have previously gone unexplored. Findings also suggest that globalization affects the volatility of collective confidence: In each instance, parameter estimates of the effect of economic openness on model variance are positive and, in three of the four models, estimated with precision. These findings provide us with motivation for investigating the

consequences for globalization for policy preferences.

Economic Globalization and Policy Demands

In this section, I provide a test of hypothesis 3 on how exposure to the world economy affects public policy demands. Recall that the expectation is that globalization lowers demands for economic policy responses while, in compensating fashion, heighten- ing the electorate's desires for solutions to noneconomic concerns. Testing this hypothesis requires identifying issue domains that vary in the extent to which they are susceptible to external economic shocks. I assume that, at least in the minds of the public, market integration has a strong effect on government control over economic policy and only a weak (or zero) effect on social or "noneconomic" issues. To measure economic policy demands, I use data on mass preferences for policies to reduce unemployment.'7 To measure demands for responses in a noneconomic domain, I examine public demands to reduce violence and crime.

As above, analyses are performed using monthly time-series data.'" The dependent variables, policy demands, are taken from the following question: "Among the following, which do you think the government should be most concerned with at the present time?"'9 Unlike Gallup's "most important problem"

(MIP) series of the American public, this survey item fruitfully links issue concerns to preferences for policy action. And with an explicit reference to "the government," it avoids the ambiguity that plagues the utility of the MIP series (Wlezien 2005). The item has five response categories: "fight high prices," "fight unemployment," "fight violence and crime," "maintain pur- chasing power," and "maintain social peace." Aggregate responses to "fight unemployment" and "fight violence and crime" exhibit the most variation over time. From these response categories, I construct measures of net public demand for policy to fight unemployment and to fight violence and crime, respectively. Unemployment Demand is the percentage of those responding "fight unemployment" minus those who responded with other policy concerns, and Crime Demand is the percent who answer "fight violence and crime" less all other responses.20 The expectation is that economic exposure will be negatively associated with demands for unemployment policy but positively related to demands to fight violence and crime.

To control for the effect of objective performance, I include the seasonally adjusted unemployment rate. As the unemployment rate increases, the share of respondents who demand policies to combat unemployment should rise as well. I also include partisan dummy variables for Frangois Mitterrand's presidency and periods of Left-led governments. Following issue ownership theories of party competition, the public may increase demands for action to combat unemployment when the left is in control, while increasing demands to stymie violence and crime when the right is in power.21

I again use an ECM specification to assess the dynamics of expressed public policy demands. This model is of the form

ADEMAND, = to + oIDEMANDtQ

+ PoAGLOBt

+ ,GLOB,_, + 2AUNERATE, + P3UNERATE,_ + P4MITT, + P5LEFTPM, +

a,, (2)

where DEMAND = public demands for policy responses (to address either unemployment or crime and violence), UNERATE = the unemployment rate, MITT = Mitterrand presidency indicator, LEFTPM = indicator variable equaling 1 for periods with a Socialist PM and 0 otherwise. All else is as previously defined. Since the policy demands series are constructed using aggregate responses to the same closed-ended survey question, unmeasured shocks may affect both regressions. Accordingly, I estimate


Table 3 Economic Globalization and Public Policy Demands, Seemingly Unrelated Regression (SUR) Estimates

Dependent Variable: Dependent Variable: AUnemployment Demand ACrime Demand

Model 5 Model 6 Model 7 Model 8

Standard Standard Standard Standard Coefficient Error Coefficient Error Coefficient Error Coefficient Error

Constant -62.68** 12.09 -72.26** 10.87 14.56 11.55 31.55** 8.92 Trade openness

Difference, -1.54 2.53 -1.91 2.81

Level,1, -0.44** 0.14 0.51** 0.16 Capital flows

Difference, 0.37 0.47 -0.83 0.52

Level,t- -0.18** 0.09 0.20** 0.10 Unemployment Rate

Difference, 1.22 5.73 1.88 5.69 5.44 6.38 6.56 6.30 Levelt- 8.33** 1.07 7.38** 1.03 -5.47** 0.88 -4.91"* 0.86

Error correction model (ECM) adjustment,~, -0.37** 0.04 -0.33** 0.04 -0.39** 0.04 -0.36** 0.04

Mitterrand presidency, 5.27** 2.06 7.97** 1.70 -3.63 2.27 -7.13** 1.80 Left government, 3.42** 1.25 3.24** 1.31 -1.73 1.38 -1.38 1.45 R2 0.17 0.16 0.16 0.16 Ljung-Box Q 0.79 1.55 0.07 0.36 Ljung-Box Q2 1.46 2.33 2.99* 4.38**

Note: Series is monthly from March 1985 to March 2002. Cells report ordinary least squares (OLS) estimates with standard errors estimated using SUR. T = 207. *p < .10. **p < .05 (two-tailed tests).

models using seemingly unrelated regression (SUR), a multiequation version of ordinary least squares that corrects for correlated errors.22

Table 3 displays the results. The first two models examine the effect of economic globalization on public concerns for unemployment. As we would expect, the actual rate of unemployment has a positive and sub- stantial influence on the net percentage of respondents who think the government should be most concerned with unemployment. Also consistent with expectations, unemployment demands are higher during periods when the Socialist Party controls the executive, whether it is the presidency (MITT) or the PM's office (LEFTPM). Our chief interest, however, is the effect of the global economy. Results show that the long-run impact of economic globalization is to reduce public demands for policies aimed at ameliorating French unemployment. Model 5 shows that, all else equal, the effect of a 5 percent shock to Trade Openness lowers Unemployment Demand by 6 percent. And model 6 shows that a shock to Capital Flows of the same mag- nitude reduces the dependent variable by nearly 3 percent, ceteris paribus.23 Under conditions of heightened market integration, fewer people demand that their

government do something about and (by extension) be held responsible for unemployment.

Crime Demand is the dependent variable in models 7 and 8. In these models, the unemployment rate is again statistically significant, though this time the coefficient is negatively signed. All else equal, respondents are more likely to identify crime and violence as an issue deserving of government attention when other concerns-namely, the unemployment rate-are under control. Coefficients on Trade Openness and Capital Flows are now positive: public demands for addressing crime and violence increase as the French economy becomes more integrated into global markets. What accounts for this globalization-Crime Demand relationship? Do individuals believe globalization "causes" crime and violence? Probably not. More likely the observed relationship is a byproduct of changing perceptions of policy maker capacity. While economic concerns have dominated French politics during the postwar era (Anderson 1995, 35-36), liberalization and privatization reforms imply that governments can now do less to affect economic growth and job creation. Accordingly, globalization has meant that citizens demand relatively less from


national politicians in the economy and relatively more in other issues not primarily considered economic. These include health care, old-age pensions, and, as demonstrated here, violence and crime. In short, the public compensates. Results reported in Table 3 support arguments that economic globalization is reshaping the salience of issue concerns in advanced industrial democracies.

Conclusion

Observers of French politics have for some time suspected that the fruits of market liberalization have come at a cost to French democracy. Globalization is thought to limit the options available to policy makers, particularly in lean times. Calling attention to this

straightjacket, former interior minister Jean-Pierre Chevenement recently equated the situation facing French policy makers to that of a being held captive in a "Bermuda triangle" caused by a recessionary international economy, a budgetary constraint imposed by the European Union, and domestic spending com- mitments (The Economist, September 2, 2002). More fundamentally, a narrow policy room to maneuver may affect public confidence in French political institutions. Economists Klaus Schwab and Thierry Malleret recently identified a loss of confidence in French society-a phenomenon that, they asserted, "results from the combination of two main factors: globalization and ... accountability," adding that "there is a strong correlation between the rising power of globalization and the erosion of sentiments of confidence" (Le Figaro, February 24, 2003).

This article marks the first direct examination of how globalization shapes citizen assessments of their policy makers. Findings show that exposure to the global economy lowers public confidence in the president and contributes to uncertainty over how to evaluate the president's and PM's policy-making capacity. What is more, exposure to international trade and capital flows lead voters to reduce their demands for economic policy solutions-captured in terms of fighting unemployment-while compensating by increasing demands in noneconomic areas-measured here in terms of fighting violence and crime. These findings lend credence to remarks made by pundits regarding connections between international economics and national politics while at the same time questioning scholarship that has suggested that openness and responsive government are compatible (e.g., Cameron 1978; Katzenstein 1985; Garrett 1998).

Results have implications for several areas in political science. First, findings bear on how we judge the effect of globalization on policy efficacy. Today, globalization skeptics outnumber proponents of the globalization thesis. Most political economists assert that, overall, the policy effects of integrated markets remain limited. According to revisionist arguments, market integration may even improve policy efficacy. Accordingly, many contributors to the globalization literature have ceased asking whether economic openness constrains policy room to maneuver and instead examine why race-to- the-bottom scenarios have failed to materialize. By taking public perceptions into account, this study shows that this shift in focus is premature at best and perhaps unwarranted. Research that addresses policy efficacy (e.g., Clark 2003) and policy retrenchment (e.g., Hicks and Zorn 2005) should be revisited in the context of public evaluations of policy maker competence.

Second, study results indicate that studies of mass political behavior should include measures of globalization in their models. Many observers of French political behavior claim that despite frequent changes in rules, governments, and party names, the enduring forces of class, religion, and ideology mean that voter evaluations of political elites remain predictable (see, e.g., contributions to Lewis-Beck 2004). The reliabil- ity of these and other predictors, however, may be contingent on the economy beyond national borders. Further research at the micro level should investigate how globalization affects voting decisions and election outcomes.

Finally, results have implications for democratic accountability. Empirical investigations of electoral accountability in industrial democracies typically focus on some aspect of the economy, with the expectation that voters punish political incumbents when the economy performs below expectations. Referendum models of retrospective voting, however, rely on an assumption that voters believe their governments have some control over the levers that affect economic performance. Findings from this study question this assumption. Analyses of policy demands showed that public preferences for improving the economy are strong when exposure to world markets is low. But when the economy becomes more exposed to international competition, public demands migrate to other concerns-concerns that are only indirectly related to the economy. The upshot is that globalization may diversify the demands placed on politicians. Whether this is a good thing for representation remains open to interpretation. On one hand, globalization may expand the set of issues the government is held accountable


for, suggesting a broader base for policy responsiveness. On the other hand, to the extent that it contributes to uncertainty over the policy control, the diversification of demands may contribute to a loss of democratic accountability.

Notes

1. Adolf Grimme Institut press release, August 8, 2002. 2. Parties on the Left, for example, are typically viewed as

more competent on matters of education and welfare, while parties on the Right have stronger reputations on crime and defense.

3. Individual- and institutional-level factors may also affect the citizen's ability to evaluate policy makers. For purposes here, however, I hold these factors "constant" and draw comparisons between closed and open economies.

4. Personal interviews, Febuary/March 2003, Paris. 5. Where scholars differ is regarding the consequences of

public ignorance for the functioning of democracy (e.g., Althaus 2003; Page and Shapiro 1992), a topic beyond the scope of this article.

6. Hypotheses 1 and 2 are not inconsistent with one another.

Hypothesis 1 states that globalization should reduce mean levels of aggregate confidence because national policy makers no longer exercise as much control. Some individuals process this reduction of control, while others, faced with a more complex political environment, become less certain of how to evaluate policy makers.

7. "Faites-vous tout a fait confiance, plutOt confiance, plut8t pas confiance ou pas du tout confiance 'a [nom de president / nom de premier ministre] pour rdsoudre les problemes qui se posent en France actuellement?" The data are from SOFRES and are

published monthly in Le Figaro Magazine. 8. In their comprehensive study of the American macro-polity,

Erikson, MacKuen, and Stimson (2002, chap. 2) were required to resort to content analysis to develop a similar measure for the American president, which they called "presidential control."

9. Trade Openness and Capital Flows are available only at quarterly increments. Linear interpolation is used to create series

monthly series. I reanalyzed all models with quarterly data and found no substantive differences from what is reported in Tables 1 and 2. These results are available upon request.

10. Semiparametric estimates of the fractional differencing parameter (d) for the series are as follows: public confidence in the

president, .78; public confidence in the PM, .78; trade openness, .51; capital flows, .63; consumer confidence, .94, all statistically significant at p < .05. When 0 < d < .5, the series is said to be long- memoried but stationary. When 1.0 > d 2 .5, the series is said to be variance nonstationary, but shocks eventually decay to zero

(Phillips and Xiao 1999; Box-Steffensmeier and Smith 1998). 11. While many error correction model (ECM) applications in

political science proceed after demonstrating a co-integrating relationship, De Boef and Keele (2005) showed this is not a pre- requisite for estimating an ECM.

12. As a ratio of two coefficients, the standard error for the long run multiplier effect of X, on Y, is not provided by regression output but can be approximated using the formula Var(alb) =

(1/b2)Var(a) + (a2/b4)Var(b)- 2(alb3)Cov(a, b). 13. The ECM specification presents no particular problems for

the variance component. To see this, note that the ECM can be

rewritten as the more familiar first-order autoregressive distrib- uted lag (ADL) with exogenous series entered at time t and at t - 1 as

PUBCONFt = ao +

a1PUBCONF,_ +

OoGLOB, +

PIGLOB,_1 + P2CONSt + P3CONS,1_

+ P4EVENTS + e, using the Bardsen transformation (Bannerjee et al. 1993; De Boef and Keele 2005). Whether estimating the ADL or the ECM, parameter estimates of the variance model are identical.

14. Conley (2006) suggested that during the cohabitation

period of 1997 to 2002, President Jacques Chirac was able to maintain better than expected approval ratings precisely because he emphasized his nonpolicy role as guardian of the constitution while downplaying his role as chief policy maker, a role he had embraced during the 1995 to 1997 period of unified government.

15. Calculations for long-run multipliers are based on unrounded

parameter estimates on the variables of interest. Standard errors are calculated per the equation in note 12.

16. The exception is the 1993 to 1995 cohabitation period, which, of the three, witnessed the least amount of partisan dead- lock as the policies of Socialist President Francois Mitterrand and Gaullist PM Edouard Balladur were generally in accord with one another, particularly on matters of the economy.

17. Unemployment is of interest for several reasons. First, unemployment ranks as one if not the most salient and protracted problem facing political elites over the past thirty years (Anderson 1995, 35-36). Second, unemployment data are widely reported and easily interpreted, providing the potential for a high degree of

responsiveness. Third, perceptions of the salience of unemployment often do not correspond to national unemployment rates, meaning that unemployment salience is a distinct issue from

objective unemployment (Baxandall 2001). 18. Regressions on quarterly data yielded the same substan-

tive findings as what is reported below with the exception that the effect of Capital Flows on Crime Demand is not statistically significant. Results of these model runs are available upon request.

19. "Parmi les choses suivantes, quelle est celle dont le gou- vernement doit, selon vous, s'occuper en priorit6 a l'heure actuelle?" The data are collected by SOFRES and published monthly in Le Figaro.

20. An alternative measure would be to construct aggregate data from responses to an open-ended survey question. Such a

question has not been regularly asked in France. But even if it were, the use of open-ended questions does not eliminate problems of interdependence among categories of responses. As Wlezien (2005) has shown, there are high levels of interdependence among categories of mentions in the open-ended Gallup most important problem (MIP) time series.

21. I initially included consumer confidence, inflation, and the political events series as regressors. These were found to have no effect on model results and are not included in the models

reported below. While crime statistics would also be appropriate, these data are available only at annual increments.

22. For a discussion of seemingly unrelated regression (SUR), see Greene (2000, 614-36). Applications in political science include Clarke et al. (2004) and Tomz, Tucker, and Wittenberg (2002).

23. These interpretations are based on the long-run multiplier effects of the variables. The coefficients are -1.18 [= -.44/-(-.37)] for model 5 and -0.55 [= -.18/-(-.33)] for model 6. Multiply- ing these coefficients by 5 produces the effects reported in the text.


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