Kenneth Scheve - (ZOOM ONLY) Trains, Trade, and Transformation: A Spatial Rogowski Theory of America's 19th Century Protectionism
We study the effect of expanding trade on societal coalitions through its impact on development. We combine a majoritarian political model with a spatial model of international trade to argue that trade-induced structural transformations---specifically the extent to which decreased trade costs bring new workers and higher population density to locations closer to world markets---can lead to the loss of political power by the factors of production most advantaged by increased trade. We study this phenomenon in the late 19th century United States to explain the spatial and temporal distribution of rising protectionist opinion from 1880 to 1900. Employing county-level data, we use changes in the cost of transportation to the nearest major port induced by the expansion of the US railroad network to estimate the economic and political consequences of expanding trade. Our estimates indicate that falling transportation costs increased farm output, land values, and population density but reduced the portion of the population employed in agriculture. We show that reduced transportation costs caused a reduction in county vote shares for the Democratic party, which at this time represented the interests of agriculture including liberal trade policies. Using a new measure of protectionist sentiment developed from local newspapers, we also show that falling transportation costs caused an increase in support for protectionism. Trade's impact on structural transformations associated with development can be an important mechanism for its effect on societal coalitions and public policy.
Kenneth Scheve is Professor of Political Science and Global Affairs at Yale University. He is a political economist who broadly studies the domestic and international governance of modern capitalism. His research studies inequality and redistribution; the politics of globalization, the social and political consequences of long run economic change; and climate politics. Scheve is the author, with David Stasavage, of Taxing the Rich: A History of Fiscal Fairness in the United States and Europe, which examines the role of fairness concerns in the politics of progressive taxation from the early 19th century through contemporary debates. He is also the author, with Matthew Slaughter, of Globalization and the Perceptions of American Workers, examining American public opinion about the liberalization of trade, immigration, and foreign direct investment policies. Scheve received a B.A. with highest honors in Economics from the University of Notre Dame and a PhD from Harvard University. He is a recipient of the David A. Lake Award, Michael Wallerstein Award, the Franklin L. Burdette/Pi Sigma Alpha Award, Robert O. Keohane Award and the International Studies Association’s Society for Women in International Political Economy Mentor Award, and he is a member of the American Academy of Arts and Sciences. Scheve came to Yale after most recently an appointment as a Professor of Political Science and Senior Fellow at the Freeman Spogli Institute for International Studies at Stanford University.