Is There Electoral Cycles in Globalization Process? Evidence From 78 Democratic Countries, 1975-2006

Abstract

I investigate whether timing of the elections impact globalization process or not in democratic countries across the globe. In other words, do elections slowdown globalization process? The theoretical underpinning is that, globalization process lead to economic and social hardships in short run but benefit the economy in the long run. The motto behind slowing down globalization process before elections is that it leads to polarization of voters and thus negatively affects the incumbent government. I make use of Axel Dreherís comprehensive globalization index as proxy for overall globalization process; economic globalization index for economic globalization policies and restrictions index as proxy for removal of trade and financial restrictions. I then construct ëinstrumental electoral cycleí to capture the scheduled and midterm election cycle. Using cross-sectional time series data for 78 democratic countries for the period 1975 ñ 2006, I find that scheduled elections are associated with slow down in all the three forms of globalization process, whereas midterm elections are not. Replacing all three Dreherís indices with our modified indices does not alter the results. I also find that slow down in globalization process is responsive to the propinquity to a scheduled election year. Meaning, as incumbent government nears the scheduled elections, globalization process keeps slowing down, while this is exactly opposite during the early years of incumbent government in office. These results suggest that elections generate ìelectoral globalization cycleî in democratic countries.