The politics of free trade
trade, most observers acknowledge, brings long-term economic gain.
But does it also carry political consequences? Lloyd Gruber, associate
professor in the Irving B. Harris School of Public Policy Studies,
believes it does-and notes that they may be negative.
back from a year's sabbatical at the Brookings Institution in
Washington, D.C., studies how globalization relates to a country's
internal political relations. "We don't know as much as we
probably ought to about how trade liberation affects the performance
of domestic political institutions," says Gruber, author
of Ruling the World: Power Politics and the Rise of Supranational
Institutions (Princeton, 2000). "For example, do open
societies have a harder time governing and reconciling differences
among various societal groups?"
where the political geography of inequality comes into play. "You
can have a society that is polarized among rich and poor, but
if rich and poor are living together-intermingled spatially-there
will be strong pressures for political representatives to move
toward the moderate center and away from the extremes," he
explains. "In cosmopolitan cities, for example, people from
different ethnic groups all live together, and those cities are
not typically cauldrons of political violence. The problems tend
to come when the inequality has a spatial element, the rich in
enclaves in the suburbs and the poor clustered in the inner cities.
In those situations, political representatives are less interested
in finding common ground. Instead, their focus is on speaking
to their own homogeneous constituencies."
inequality, says Gruber, disrupts domestic political harmony-and
trade liberalization can be a major cause of spatial inequality.
"When markets are protected and suppliers and customers are
all within a country's borders, there are strong pressures to
concentrate business activities in a single location," he
explains. "That reduces the costs of transacting across space
and results in an intermingling of rich and poor." Almost
overnight, globalization changes everything-suppliers and customers
are international so there is less reason to cluster business
activities. "We are seeing this happen in Mexico," Gruber
says. "If you are wealthy, you can now live in enclaves virtually
anywhere in the country and you don't have to live near poor people
in Mexico City or other congested urban centers. The pattern worries
me, and it's a development that badly needs to be studied."
uses census data to analyze economic segregation within and across
electoral districts, both in the United States and around the
world, and he spent his leave scouring the current literature
on cases of political upheaval in which the effects of spatial
inequality had not previously been factored in. He gives the example
of the former Yugoslavia. "It became very segregated economically
in the years after communism," Gruber notes. The rich provinces
of Slovenia and Croatia in the north were closer to Europe and
better able to benefit from trade liberalization. The more distant
Serbia, however, developed much less rapidly than its northern
counterparts. "I argue that economic segregation was a very
important factor in Slovenia's and Croatia's decisions to secede
and in the political upheaval and violent war that resulted. They
were basically taking the most economically productive people
out of the country." What was left was a "rump state"-and
the political disharmony caused by spatial inequality.
research focuses entirely on inequality-the haves versus
the have nots," says Gruber, "but for me the
question is where the two groups live. When haves live
apart from have nots, you might get growth but not high-quality
growth, and the well-being of the poor is hurt."