INSTITUTE FOR POLICY RESEARCH

The Impact of Going Global

Workshop explores social, economic, and political effects

Northwestern University Provost Jonathan Holloway and Vice President of Research Jay Walsh welcomed more than 40 interdisciplinary scholars to the second workshop, co-hosted by the Buffett Institute for Global Studies and the Institute for Policy Research (IPR) on May 24–25 in Evanston.

The workshop embodies scholarly excellence and global citizenship at the University, Holloway said, as “it is open to all kinds of questions wherever they happen to be expressed, or however—and that means everywhere in the world.”

Walsh pointed to how Northwestern extends its research impact at home and abroad through a variety of global partnerships within the University’s nearly 150 research institutes and centers at the University, including Buffett and IPR.

Sociologist Bruce Carruthers, Buffett’s outgoing director, explained why the workshop necessitated a cross-disciplinary approach.  

“You really can’t just bring a single discipline to the table and imagine that you’re going to understand what’s going on,” Carruthers said.

The six panels tackled a wide spectrum of interrelated topics across diverse perspectives from economics, political science, anthropology, sociology, history, philosophy, and law.

Though IPR has historically emphasized national policy, “global research has also become an increasingly important aspect of our portfolio,” said its director and economist Diane Whitmore Schanzenbach. “We approach research questions across many fields, and we’re open to many voices.” Schanzenbach also thanked IPR economist David Figlio, dean of Northwestern’s School of Education and Social Policy, for his work in organizing the conference while he was IPR director.

Effects of Globalization on:

Elites | Health | Interdependence | Employment | Politics | Migration

Globalization for Elites
The rise of a global elite has paralleled the rise of worldwide trade, and several scholars offered their research insights into how the ultra-affluent tend to their wealth in a session moderated by IPR sociologist and Buffett affiliate Monica Prasad.

Oligarchs around the world avoid paying taxes by hiding assets in offshore secrecy havens, like those in Bermuda or the Cayman Islands. Buffett political scientist Jeffrey Winters points to a new development: High-wealth individuals and corporations, known as “litigation funders,” are bankrolling legal action to chase after offshore assets in return for proceeds from winning the case. He is examining how this is disrupting power relations among oligarchs while aggressively challenging secrecy barriers in the offshore world.

In a globalized economy, do higher taxes drive millionaires to leave some states or countries to move to lower-taxed places? Stanford University sociologist Cristobal Young found that wealthy individuals do sometimes flee taxes, but their numbers are small. Roughly 95 percent of the world’s billionaires, for example, still live in the country where they were born or launched their careers.

Max Schanzenbach, a Northwestern legal scholar and IPR associate, discussed his research with Robert Sitkoff of Harvard University on environmental, social, and governance (ESG) investing, which considers the social and environmental impacts of a firm’s policies and products. The United Nations launched its Principals of Responsible Investing (PRI) in 2005 to persuade investors worldwide to adhere to ESG principles. However, in common law systems like that of the United States, PRI conflicts with the laws of fiduciary duty, which binds fiduciaries to look out for their clients’ best financial interests.

Health Effects of Globalization

Globalization has not had the same effects on health throughout the world, scholars noted in a session moderated by IPR biological anthropologist Thomas McDade.

Buffett historian Helen Tilley explained how travel, trade, and conquest touched off uneven pandemics between the 14^th and 20^th centuries that united previously separate regions of the world. As diseases and empires expanded their reach, biomedical approaches to health became more entrenched, while other cultures’ healing practices also persisted, often in spite of state policies.  

Since global market forces have transformed economies, what impact has this had on nutrition? Northwestern anthropologist William Leonard discussed how the world has seen major reductions in hunger and child malnutrition over the past 25 years, but the gains have been uneven across regions. Meanwhile, obesity rates are growing, leading to a dual burden of over- and undernutrition across the world.

Food security is not the only issue, according to IPR anthropologist Sera Young. She noted how water insecurity is also at play, with consequences for both psychosocial and physical health. Young is working to develop a cross-cultural measure of household water insecurity, which she hopes to complete by the end of the year. Her research team is validating the scale in 29 study sites including India, Samoa, Guatemala, and Ghana.

Managing Global Interdependence

The focus of the third session of the workshop was the benefits and challenges of global trade to traditional legal and economic agreements, moderated by Manu Bhardwaj (Weinberg '00) of the Mastercard Center for Inclusive Growth, who died unexpectedly in July.

Discussing origins of global free trade, Buffett political scientist Karen Alter explained how the rules-based, multilateral system, created by the United States, is in peril. “Trump is not a big fan of multilateralism, and he is not alone,” she said. Focused on the World Trade Organization (WTO), Alter described how the Trump administration is diminishing the WTO’s effectiveness, and she queried China’s willingness to lead through multilateralism, questioning whether China will match actions to words to save the WTO. 

Northwestern legal scholar Jide Nzelibe described how domestic political instability can affect international trade agreements. These agreements are typically “strange, boring things that only some economists think about.” They can, however, erupt as “identity markers” in the public’s mind, sowing instability around agreements—much like what happened with NAFTA in the 2016 U.S. presidential election. “If you want a trade system that works, then you want it to be boring,” Nzelibe said. “Once mass audiences care about it, you lose control.”

The rule of international law is generally seen as “a good and apolitical solution” to global problems, said Northwestern political scientist Ian Hurd. But closer scrutiny reveals that it cuts both ways. For instance, international convention bans commercial whale hunting in the Southern Ocean, but allows it for scientific research. So Japan reclassified its commercial operations “under the heading of science.” Said Hurd, “In these kinds of fights, law is being weaponized,” with governments cherry-picking the parts most advantageous to their interests.

Attending the Paris Climate Change Summit in 2015, environmental social scientist Kim Suiseeya documented how indigenous peoples overcome structural constraints to participating in global negotiations by, for example, using Twitter to dispute the loss of a clause ensuring their land rights. “It shines light on how indigenous people are not really powerless and how they can leverage their resources and be part of conversation,” Suiseeya said. She and her team are piloting a new method, “collaborative event ethnography,” to detail how indigenous peoples experience representation at such events.

Domestic Employment Effects of Globalization

Global economic forces and immigration are causing seismic shifts in domestic employment. Scholars addressed some of the positive and negative consequences in a session chaired by Kellogg economist and IPR associate Janice Eberly. 

U.S. growth is boosted by immigrant innovation, according to Jennifer Hunt, a Rutgers University economist. Hunt explained that college-educated immigrants accounted for a third of new U.S. patents from 1990–2000. She speculated that this increased growth could be enough to benefit all Americans in the long run, and she judged that the immigration of innovators to the United States also increases world growth because the U.S. is a particularly good environment for innovation and entrepreneurship.

How has China’s rise as a world manufacturing power —the “China shock”—affected U.S. labor markets and Americans working and residing in communities with import-competing industries? Economists David Autor of the Massachusetts Institute of Technology and David Dorn of the University of Zurich explained that workers employed in China-exposed manufacturing in the early 1990s changed jobs more frequently and had lower wages over their careers. Communities where manufacturing withered saw more young men without a college education who were neither working nor in school. Additionally, marriage and fertility declined, one-parent families and child poverty increased, and deaths of young adults from drug and alcohol poisoning spiked.

Martí Mestieri, a Northwestern economist, also discussed the “China shock,” comparing what happened in the United States with what took place in France when China joined the WTO. While American wages dropped by nearly 3 percent, French wages only dropped by 1 percent. The French also worked fewer hours per year and had shorter employment contracts. French workers in low-skill occupations were 30 percent more likely to change occupations, but did not change their industry or where they lived.

Domestic Political Effects of Globalization

Globalization is also affecting U.S. politics, scholars noted in a session moderated by IPR political scientist Laurel Harbridge-Yong.

IPR political scientist Daniel Galvin addressed the changing politics of workers’ rights, highlighting how in the 1950s, one-third of all U.S. workers were in unions, but only about 10 percent were in 2016. Labor law has not been amended in over 40 years, while states have increasingly passed more employment laws to address many of the same issues that would have otherwise been subject to collective bargaining. This shift can lead to inequalities in workers’ rights, Galvin argued.

Economic production, more so than consumption, is central to people’s identity, life satisfaction, economic opportunity, and the health of their families and communities, noted policy researcher Oren Cass of the Manhattan Institute. He presented analysis from his forthcoming book, The Once and Future Worker, showing that while globalization benefits people as consumers, its success and sustainability will require it to demonstrate clear benefits for them as workers, too. 

Political scientist and IPR associate Thomas Ogorzalek examined how globalization has affected the urban-rural divide. The 2016 election was not an anomaly in recent trends, he noted, rather it revealed longstanding friction between urbanites and rural areas over both free trade and immigration. Because electoral maps lag behind population movements, this kind of polarization will likely intensify.

Closing the session, political scientist Justin Gest of George Mason University outlined how globalization is perceived by many to dilute the importance of heritage and nativity. As the share of white Americans falls in the national population, many white, working-class people have come to see themselves as marginalized. This sense of cultural and economic threat has fueled the rising salience of white identity and nativism.

Immigration, Migration, Refugees, and Human Rights

The dire situation of millions of refugees was the subject of philosophical, legal, and policy analyses in the workshop’s last session, moderated by IPR political scientist Rachel Beatty Riedl.

Cristina Lafont, a Northwestern philosophy professor and Buffett fellow, pointed out that human rights protections are under serious strain in our globalized economy. A powerful global economic order protects international capital and property, she said, yet individual states can only weakly protect their populations’ human rights. Because the current state-centric system is failing millions of people, Lafont urged a new model for allocating human rights obligations not only to states but also to non-state actors such as international organizations and transnational corporations to ensure the protection of human rights worldwide.

Can legal or other types of institutions help the 700,000 displaced Syrians living in Lebanon, a war-ravaged country of only 6 million? Northwestern law professor and Buffett affiliate Juliet Sorensen described how Lebanese laws and rules provided only limited solutions to the crisis. The only rule that led to a “just conclusion” was an NGO’s commitment to “embrace Syrian refugees” by embedding itself in the Syrian refugee community.

Why is nearly 1 percent of the world’s population—the highest level recorded—now displaced? Northwestern political scientist Will Reno contextualized the political upheaval and armed conflicts that drive the displacement of millions. What matters is not how long conflicts last, but their character. “Conflicts of state collapse,” he said, lead to “failed states” with few or no functional institutions, and the collapse of Iraq, Syria, and others is driving the current refugee crisis. 

As of May 2018, more than 3.6 million of Syria’s 5.6 million refugees had fled to Turkey. How has this influx affected the host country? Semih Tumen of Turkey’s Central Bank and the Institute of Labor Economics, outlined the impact. While the estimates suggest rather limited short-term effects, the longer-term effects on jobs and education will likely be destructive to low-income Turkish citizens.

Main photo and photo of Strobe Talbott by Mike Bacos. All other photos by IPR staff.

Published: July 31, 2018.