Economic globalization,inequality,and protest movements under capitalist political regimes,1970

Abstract

This article examines the impacts of globalization on protest movements. Highlighting the nature of capitalist political regimes in which capitalist societies and political institutions are deeply interconnected, I argue that the relationship between globalization and protest is profoundly constrained by two domestic conditions: the distribution of material resources and the type of political regime. Based on time-series, cross-sectional (TSCS) data in a global sample for the period 1970–2007, the findings indicate that globalization is more likely to increase protest in egalitarian democracies; globalization is not systematically associated with protest under dictatorships, except in the case of a highly unequal dictatorship in which globalization appears to revitalize protest, and hyperglobalization radically diminishes the possibility of protest, especially in democracies.

Keywords

Capitalism globalization inequality neoliberalism political regime protest

Introduction

Does globalization increase global protest? In the ruins of the 2008 economic crisis when the global economy plunged into deep recession, we witnessed a great wave of global civil uprisings. Starting in Tunisia, the wrath of the people spread to Egypt, where its dictator was dethroned dramatically, and then to other old dictatorships in the Middle East. In the old democracies of Europe and North America, citizens occupied the streets, demonstrating that something was seriously wrong. Even in the fast-growing countries of Brazil, Turkey, South Korea, and Sweden, perceived as success stories of economic development, civil eruptions are taking place. In fact, in China, with near double-digit growth, the amount of unfettered social unrest escalated to the point that it frightened the Politburo and forced it to declare a state campaign to achieve a ‘harmonious society’. What seems to unite the protests around the world, for all their stripes and creeds, is that they are a reaction against neoliberal globalization, a particular globalization of unbridled market expansion that almost brought down the global economy. Hence, people strike back, and thus globalization appears to revitalize extra-parliamentary protest activity.

This image of civil society’s backlash against globalization is juxtaposed against another popular picture of the inevitability of economic globalization: State autonomy is being eroded by ever expanding footloose markets, and relentless competition for foreign investment is forcing divergent governments to adopt convergent policies desired by transnational corporations. This popular view suggests that because the state is no longer autonomous, popular sovereignty is gravely curtailed by the force of globalization. Because globalization is inevitable, governments impose market imperatives on civil society so that corporate power increases, the political spectrum shifts to the right, and civil society organizations and unions are muzzled by unemployment. Thus, democracy is anemic in the face of economic globalization. Globalization creates a ‘democratic deficit’ by empowering inter-governmental organizations such as the World Bank and International Monetary Fund (IMF), which are not accountable to citizens. Even though social movements erupt here and there, they are all short-lived and should not be seen as a systematic pattern.

The existing studies largely reflect these two contrasting popular views, as explored in the next section. Given the indeterminate nature of the domestic consequences of globalization, theoretical works hinge on other parameters of political regime and inequality. On one hand, globalization brings about an active movement society in democracies and amplifies room for protest movements (e.g. Della Porta, 2015; Flesher Fominaya, 2014; Munck, 2007). On the other hand, democracy can weaken the relationship between globalization and protest because it provides an institutional forum in which social tensions are resolved by parliamentary, not extra-parliamentary, politics (e.g. Garrett, 1998; Hays, 2009; Swank, 2002). Socioeconomic inequality also plays a central role in mediating the impacts of globalization, but with cross-cutting effects. The more unequal the society, the greater the incentive for citizens to manifest their grievances in the streets (e.g. Cramer and Kaufman, 2011; Gurr, 1972; Roberts, 2008). However, increasing income inequality may make citizens risk averse because they face greater collective action problems or are more ideologically dominated (e.g. Brown, 2006; Holzner, 2007; Kurtz, 2004). Conflicting theoretical expectations have produced only mixed empirical results. Despite a multitude of studies, the jury is still out.

This article advances the current debate in two ways. First, I explicitly formulate a mechanism under which economic globalization influences protest movements by incorporating two domestic conditions: political regime and inequality. The idea is that societal collective actions are inherently circumscribed by the distribution of material resources, characteristic of capitalism, and by the type of political regime. By directly linking political regime to socioeconomic inequality, my theoretical framework highlights that capitalist societies and political institutions are deeply interconnected. Thus, the empirical model I advance is an attempt to capture the conditional effects of globalization on the various domestic configurations. In other words, the model estimates how the impacts of globalization on protest are exacerbated or mitigated by both inequality and political regime. To the best of my knowledge, none of the existing empirical studies investigated these two domestic factors simultaneously and interactively. Second, while there is now an enormous volume of case studies on this issue, systematic empirical tests for a large-N sample are rare, and the general pattern of societal collective actions against globalization remains unknown. Utilizing the conditional model, the article provides statistical analysis of a global sample (116 countries) for the period from 1970 to 2007 for which the necessary data are available. The main results demonstrate that (1) globalization is more likely to increase protest in egalitarian democracies, (2) globalization is not systematically associated with protest under dictatorships, except in the case of a highly unequal dictatorship in which globalization appears to revitalize protest, and (3) hyperglobalization radically diminishes the possibility of protest, especially in democracies. These findings remain robust across a number of control variables and measures of regime type and estimation techniques.

The literature review: divergent globalization effects

In the globalization literature, the debates center on whether globalization generates contentious collective actions and how democracy plays a mediating role. There are two competing perspectives: repoliticization and depoliticization (Arce and Kim, 2011).

The repoliticization thesis suggests that economic globalization increases social risks, fomenting social preferences against market-oriented policies, which in turn increases the likelihood of protest activity (e.g. Arce and Bellinger, 2007; Chatterji, 2013; Della Porta, 2015; Della Porta et al., 2006; Flesher Fominaya, 2014; Munck, 2007; Pickerill, 2012; Reitan, 2012; Udayagiri and Walton, 2003). This view can be traced to Karl Polanyi’s (1944/2001) insightful notion of ‘double movement’ where market expansion inevitably creates an endogenous process of its own destruction via societal countermovement. Neo-Polanyian scholars argue that unlike earlier economic globalizations, globalization since the 1970s has been radically different, that is, a neoliberal globalization characterized by simultaneous processes of trade liberalization, capital mobility, privatization, financialization, and low taxation/spending that generates the dismantling of welfare states (Block, 2015; Harvey, 2005; Kim, 2010; Piore, 2009; Rodrik, 2011). The general results indicate a growing number of people exposed to social risks (e.g. unemployment, inequality, and poverty), creeping enclosure of public space in which citizens’ voices can be heard, reduction of public services (e.g. health care, education, and social safety net), consolidating social distrust, and increasing incapacity in government (e.g. Brenner et al., 2010; Duménil and Lévy, 2011; Harvey, 2005; Polillo, 2012). Given this ordeal, people have no other choice but to revolt. Empirical research on ‘relative deprivation’ supports this argument, suggesting that those who are frustrated with the current situation tend to become involved in collective rebellion (Davies, 1962; Gurr, 1972).

From the perspective on repertoire and cultural framing of contention (e.g. Flesher Fominaya, 2014; Olesen, 2005; Rauch et al., 2007; Scott, 1977; Tarrow, 2011; Tilly, 2006), globalization also provides ‘an injustice frame’ for radicalizing and mobilizing popular sectors in civil society (Gamson, 1992: 68). Roberts (2008) argues that ‘market reforms and economic liberalization left unmet social needs or heightened economic insecurities that provided a basis for the collective articulation of political grievances’ (p. 330). Hence, neoliberal globalization is so unpopular that it unveils ‘unjust’ features of its domestic consequences, enabling societal actors to resolve collective action problems inherent in protest movements.

According to the repoliticization thesis, the effect of globalization on protest movements is greatly facilitated by democratic regimes as well. As Tilly and Tarrow (2007) claim, democratic institutions ‘guarantee a more open political opportunity structure than their opposites’ by smoothly translating social preferences into political preferences, which makes protest activity more feasible (p. 66). That more active collective disruptions occur in democracies than in dictatorships is not surprising because democracy in itself is a ‘movement society’ where extra-parliamentary politics is seen as a normal political behavior as party–parliamentary politics (McAdam and Tarrow, 2010; Meyer and Tarrow, 1998). Dictatorships are not only more oppressive but also social preferences under authoritarian regimes are unlikely to be revealed. Kuran’s (1997) ‘preference falsification’ – the act of misrepresenting one’s wants under perceived social pressure – is appropriate here. If people’s preferences are never heard because they are ‘living a lie’, collective action is simply unfeasible. Only in extremely rare conditions, usually when the situation was visibly out of rulers’ hands, did revolutionary eruptions occur under dictatorships, and they were mostly unexpected, as seen in Eastern Europe in 1989 and the Arab Spring of 2010–2011. Thus, Goldstone (2004) declares that ‘it seems clear that as democracy spreads and matures, social movement emergence and activity will grow and continue’ (p. 360).

The depoliticization thesis¹ shares with the repoliticization arguments the notion that economic globalization imposes severe material and cultural hardships on an increasing number of people. However, the process of globalization does not foster but rather inhibits collective actions in civil society (e.g. Gallagher, 2007; Holzner, 2007; Kurtz, 2004; Schoppa, 2006). Growing social risks as the result of globalization and market reforms of flexibilization of labor markets reduced the size of organized labor and generated weakening union power around the world (Wallerstein and Western, 2000). As Kurtz (2004) writes, ‘[t]hese social consequences raise significant barriers to collective political action and thus induce a decline in the organizational and mobilizational capacity of civil society’ (p. 272). In addition to material and resource problems, critics such as Brown (2006), Harvey (2005), and Žižek (2012) assert that neoliberalization as an ideological process is highly effective in legitimizing liberal ideas to the extent that people have come to accept the inevitability of globalization and its emancipation of individuals from societal collective bridles – ‘we are all neoliberals now’ (Harvey, 2005: 13). Unlike advocates for anti-globalization that gives a strategic framing of injustice for active society, neoliberal globalization dissipates political life and atomizes civil society.

Another perspective of depoliticization stems from the international political economy literature emphasizing the nature of the post-globalization state. Market integration systematically constrains the policy autonomy of national governments and causes a race-to-the-bottom (e.g. Friedman, 2000; Hellwig and Samuels, 2006; Rodrik, 2011). Unlike previous ‘thin’ globalization under the Bretton Woods system in which autonomous welfare states were guaranteed through historic compromise between capital (liberalism) and labor (socialism), ‘thick’ globalization has rendered mass democratic politics rather impotent (Rodrik, 2011; Ruggie, 1982). Because the national government has been dependent on international markets and private enterprises, ‘political decisions become less materially consequential for most citizens, and as a result potential gains from political participation decline even as individuals have fewer shared interests and face increasing difficulty organizing themselves’ (Kurtz, 2004: 273).

Whereas the repoliticization thesis highlights movement politics under democracy, scholars of representative democracy emphasize that a quintessential feature of democracy lies in the party politics through which conflicts in society are institutionally encapsulated (Przeworski, 1991, 2010). This means that ‘elections are a peaceful way of processing conflicts that otherwise may have or would have been violent’ (Przeworski, 2010: 124). It follows that extra-parliamentary politics is considered evidence of weak representative democracy, and protest activity is diminished as democracy is consolidated. Along similar lines, recent studies of globalization find that it is a representative democracy with partisan politics, encompassing unions, or a proportional electoral system that minimizes societal backlash against globalization (Garrett, 1998; Hays, 2009; Robertson and Teitelbaum, 2011; Swank, 2002).

In summary, both perspectives agree that economic globalization generates detrimental outcomes for civil society, but they differ as to whether globalization makes society contentious or docile. They largely agree that the impacts of globalization on protest movements depend on the type of political regime. However, the repoliticization thesis posits that democracy strengthens the relationship between globalization and social contention. In turn, the depoliticization thesis expects that the likelihood of protest activity is low in democratic regimes because democracy is either simply impotent in the vortex of globalization or so resilient that extra-parliamentary protest activity is institutionalized. Although existing studies make important contributions, highlighting the importance of regime type as a modifying variable affecting the relationship between globalization and protest (e.g. Arce and Kim, 2011), they largely ignore socioeconomic conditions of inequality directly linked to political regime. The next section discusses how the interconnection between inequality and political regimes can affect protest movements under the force of globalization.

Capitalist political regimes: inequality-regime nexus as domestic conditions

The idea that the force of globalization depends on particular domestic conditions can be traced to Cardoso and Faletto’s Dependency and Development (1979) in which the domestic consequences of integration into the world market are affected not only by political alliances under shifting political regimes but also by variation in the domestic socioeconomic structure. This suggests that globalization opens up opportunities and obstacles not just for political actors but also for socioeconomic actors underlying the very connection between political regime and socioeconomic conditions that plays a mediating role. The implication is obvious: We need to go back to the notion of capitalist political regimes, a perspective that capitalism and political institutions are deeply interconnected. After all, globalization as borderless and endless market expansion is a fundamentally capitalist phenomenon. Thus, focusing only on domestic political systems is not sufficient because globalization effects are also influenced by inequality in the distribution of material resources within society, a major characteristic of capitalism.

The link between inequality and protest movements is one of the oldest concerns of social sciences in general. Because the issue is burning, explanations abound (see Lichbach (1989) for an excellent review). The theory of ‘relative deprivation’ was proposed by an early generation of scholars (Davies, 1962; Gurr, 1972; Muller and Seligson, 1987), according to which inequality increases the relative frustration of most citizens, which in turn is likely to generate protests in society. Recently, Cramer and Kaufman (2011) provided statistical findings in favor of this theory in a sample of Latin America. However, this approach is challenged by a growing body of literature on contentious politics that emphasizes the political processes of protest activity and find no systematic effects of inequality (McAdam et al., 2001; Tarrow, 2011; Tilly and Tarrow, 2007). Whereas they are diverse in their perspectives and empirics, most existing works largely share one feature – the notion that inequality leads to, at least, a propensity for protest or latent protest activity, even if its realization hinges on other parameters, such as political opportunity structures, organizational capacity of movements, and articulation of rhetoric for actions. Drawing on the theories of capitalist democracy that sees inequality as an unequal distribution of resources under capitalism, however, I argue that globalization amplifies space for extra-parliamentary protest activity in democracies when inequality is low.²

Capitalist democracy does not just suggest a democratic regime in capitalism. Nor is it a system in which capitalism simply exists together with a democratic institution. Capitalist democracy is the political socioeconomic system under which seemingly political equality is inherently affected by the market mechanism that perpetually generates inequality in the socioeconomic realm. In a democracy, citizens possess political rights (e.g. the right to vote and rights of free speech and association), and they can make political demands by expressing their opinions in a variety of forums and public spaces, casting ballots in elections, and joining protest activity. In turn, capitalism is an economic system in which most productive resources are privately owned. This simple fact entails a powerful implication that most important economic decisions such as investments and employment for society as a whole are not publicly but privately made. Hence, political democracy where public decisions take place is deeply constrained by private decisions in the economic realm. Because firms control investments, and investments are vital for the overall economy, any interference in their private decisions would entail less investment (or disinvestment), which would result in a decline in production and slow down economic growth. This means that too many demands from civil society undermine ‘business confidence’ and distort firms’ otherwise optimal decisions, which ultimately hurts civil society. Because civil society fundamentally depends on firms’ private decisions, the state should also depend on them. Any government in a capitalist democracy, even a radical or socialist government, must respect the essential interests of business firms. This is the famous theory of ‘structural dependence of the state on capital’ (Przeworski and Wallerstein, 1988).

However, the degree of this structural dependence that constrains the viability of democratic civil society varies. Depending on specific institutions, for example, how the electoral system is constituted, how the party system functions, how citizens’ interests are aggregated, and how property rights are regulated, the constraint can be tight or relaxed.³ Even so, the range of possible outcomes within this structural dependence is fundamentally determined by the relative power and resources of citizens and capitalists, which gave rise to such specific institutions in the first place.⁴ Cohen and Rogers (1983) and Offe and Wiesanthal (1980) forcefully claim that capitalist democracy is intrinsically biased in favor of capitalists, and citizens face much more severe constraints on the realization of their interests. Within the boundary of the structural dependence, citizens have few options but to mobilize to have their voices heard. They can mobilize for votes and campaigns or mobilize for extra-parliamentary activity. However, successful mobilization requires a high level of coordination among citizens as well as strong solidarity, and successful coordination requires the expenditure of material resources to overcome the costs associated with such participation. In contrast, capitalists have enormous assets, so they generally have a greater advantage over citizens in solving collective action problems.⁵

Increasing income inequality means increasing resources’ concentration in the hands of capitalists and tightening resources’ constraint on civil society, which undermines the ability of citizens to act collectively. The wider the income gap in society, the more unbalanced the distribution of resources and power between elites and citizens and the less incentive for the popular sectors to engage in movement politics. Citizens have more difficulty in organizing politically and ensuring a movement’s success. In turn, capitalists face a relatively painless collective action problem because capitalists have greater material resources and operate in a system in which sociopolitical actors are structurally dependent on them. Hacker and Pierson’s (2011) study on the American political economy is informative here. Since the 1970s, business firms in the United States have been organized to destructively atomize civil society. The outcome is an exorbitantly unequal distribution of income, which also reproduces the imbalance of resources between citizens and business firms. Thus, the prospect for citizens’ protest movements is dim in capitalist democracy when inequality is high.

Whereas extra-parliamentary activity is expected in democracies, this is not the case in dictatorships simply because only a subset of people has political rights. This does not mean that there is no collective protest of citizens in dictatorships. We know from history that large-scale demonstrations led to historic moments of democratic transition, but the frequency of anti-government demonstrations, strikes, and riots, on average, is much higher in democracies than in dictatorships. Also, when social unrest occurred in dictatorships, it resulted in detrimental impacts on economic growth because it was not expected and was seen as a manifestation of political opposition (Przeworski et al., 2000: 193–194). From the perspective of capitalist regimes, most noncommunist dictatorships were overtly pro-capital and resolute defenders of private property rights from encroachment by those without property and, thus, the structural dependency was profoundly binding on civil society.⁶ Globalization strengthens this dependency, and under this condition, the possibility of citizens’ collective protest is slim. Depoliticization could be a normal state of nature under dictatorships. However, early works on the capitalist dictatorship, such as O’Donnell’s (1979) ‘bureaucratic authoritarianism’ and Cardoso and Faletto’s (1979) ‘associated dependent development’, suggested that globalization may also have destabilizing effects. The ‘deepening’ of industrialization and rising inequality as the result of globalization revitalizes civil society and leads to popular sectors’ militant uprisings, which constitutes a ‘regime crisis’. Similarly, recent political economy studies emphasize sociopolitical unrest as ‘a threat of revolution’ against dictatorial regimes greatly shaped by increasing inequality (Acemoglu and Robinson, 2006; Aidt and Jenson, 2014; Haggard and Kaufman, 2012; Kim, 2007; Przeworski, 2009).⁷ Hence, protest movements are rare and highly contingent in capitalist dictatorships. If they do occur, the protest is likely to happen when inequality is high, as opposed to the democratic counterpart. Under dictatorships, high inequality may stimulate social movements attracted by a viable alternative, the egalitarian promise of democracy.

Testable implications

We can infer testable implications from the preceding discussion about capitalist regimes. Economic globalization tightens the structural dependence of civil society and the state on capital,⁸ which generally makes protest activity difficult, but there is room for extra-parliamentary politics in capitalist democracy: Protest movements are more likely to be feasible when inequality is relatively low. The much-extolled ‘movement society’ in democracy is viable only in a condition under which the distribution of material resources is not drastically biased for the rich minority. Hence, the major hypothesis of this article is ‘globalization is more likely to generate repoliticization in an egalitarian democracy but depoliticization in an inegalitarian democracy’. In the case of a dictatorship, however, no clear causal hypothesis can be inferred. We should not expect any systematic relationship between globalization and protest under dictatorships, although several studies, as mentioned above, report a positive association between inequality and societal turbulence.

The key testable implication derived from the theoretical discussion is that the impacts of globalization on the level of extra-parliamentary protest activity depend on political democracy as well as inequality. Thus, the purpose of this empirical analysis is not only to estimate the conditional effects as to whether and how much the effects of globalization on protest are modified (strengthened or weakened) by the two domestic conditions. We also need to estimate the globalization effects under capitalist democracy, the very interconnection between a democratic regime and the distribution of income within society. In other words, we attempt to explicitly evaluate whether globalization generates depoliticization or repoliticization under either egalitarian democracy or inegalitarian democracy (and egalitarian dictatorship or inegalitarian dictatorship, for that matter). To capture this type of conditional effect, I employ a multiplicative interaction model with three-way interactions among globalization, inequality, and democracy (Brambor et al., 2006; Braumoeller, 2004; Jaccard and Turrisi, 2003).⁹

To make my empirical model explicit, Figure 1 illustrates three different causal mechanisms under which globalization influences protest movements. Model A shows a straightforward additive model in which the globalization effects are not conditional on domestic conditions. Model B is a two-way interaction model in which the effects of globalization depend on either democracy or inequality and does not capture the interconnection between these two domestic conditions. Existing empirical studies formulated one of these two models, but I employ Model C, which incorporates how the impacts of globalization on protest are mitigated or exacerbated by both inequality and democracy. By directly linking political regime to the distribution of resources in civil society, we can take into account the very nature of capitalist political regimes. This political economic interconnection, as indicated by a dashed circle in Model C, is understood as the existing domestic configurations permissible for globalization-induced protest activity. The next section provides a statistical test of these implications.

Figure 1.

Three models of globalization effects. (a) Additive model – Globalization effects on protest are independent of democracy and inequality. (b) Interaction model I – Globalization effects on protest depend on either democracy or inequality. (c) Interaction model II – Globalization effects on protest depend on both democracy and inequality.

The estimation model and data

The dependent variable, Protest, is the number of riots and anti-government demonstrations, taken from Banks’ (2010) Cross-National Time-Series Data Archive.¹⁰ As Protest is a rare event-count variable, I use the negative binomial model to deal with the problem of overdispersion underlying the data. The likelihood ratio tests for overdispersion in all the models I use indicate that the negative binomial model is preferred to the Poisson model. To account for country-specific traits and to correct for a possible serial correlation, I employ the fixed effect model with a lagged dependent variable, so that the fixed effect negative binomial model is estimated by conditional maximum likelihood (Cameron and Trivedi, 2013; Hilbe, 2011). Specifically, estimating the TSCS model with the fixed effects and a lagged dependent variable is equivalent to correcting for potential problems of autocorrelation and heteroskedasticity, as Beck and Katz (2011) explicitly show using Monte Carlo analysis. Cameron and Trivedi (2013) also explore that the estimator in the TSCS negative binomial model is designed to explicitly handle overdispersion in the count data (p. 627). This feature improves efficiency in estimation, and, unlike the Poisson model, the estimate in this model is statistically identical to the cluster–robust estimate. To check further that the results from my estimation model are not driven by these potential problems, I also transformed the dependent variable (count data) into its log form and estimated the model using the panel-corrected standard errors (PCSE). The results from this diagnostic test remain qualitatively the same as the ones from the TSCS model with fixed effects and a lagged dependent variable.

The sample includes the period of economic globalization from 1970 to 2007 for which the necessary data are available. The estimation model derived from Model C takes the following form:

\begin{array}{l} E (p r o t e s t_{i, t} | x_{i, t}) = F (α + β_{0} P r o t e s t_{i, t - 1} + β_{1} G l o b a l i z a t i o n_{i, t} + β_{2} I n e q u a l i t y_{i, t} \\ + β_{3} D e m o c r a c y_{i, t} + β_{4} G l o b a l i z a t i o n_{i, t} \times I n e q u a l i t y_{i, t} + β_{5} G l o b a l i z a t i o n_{i, t} \\ \times D e m o c r a c y_{i, t} + β_{6} I n e q u a l i t y_{i, t} \times D e m o c r a c y_{i, t} + β_{7} G l o b a l i z a t i o n_{i, t} \\ \times I n e q u a l i t y_{i, t} \times D e m o c r a c y_{i, t} + \sum β C o n t r o l s + δ_{i}) \end{array}

where exp(δ_i) is the country-specific fixed effect drawn from a gamma distribution, country is indexed by i, and year by t.¹¹

The data of Globalization are taken from the Konjunkturforschungsstelle (KOF) index of economic globalization. The KOF index, constructed by Dreher et al. (2008) and covering a large number of countries, is probably the most comprehensive measure of diverse aspects of economic globalization going back to 1970. Unlike usual measures of economic globalization, the KOF index is innovative in that it is a composite measure of both de facto and de jure features of economic globalization, capturing the overall development of economic globalization. De facto sub-indices include trade openness, foreign direct investment, portfolio investment, and payments to foreign nationals, and the de jure category contains capital account restrictions, mean tariff rate, taxes on international trade, and hidden import barriers (Dreher et al., 2008: 29–50). The values of this variable in the sample fall between 9.08 and 98.89 with a mean of 48.83. The higher value of Globalization indicates greater levels of globalization.

Following Przeworski et al. (2000), I use a dichotomous variable of Democracy, coded 1 for democracy and 0 for dictatorship. This variable is taken from Cheibub et al.’s (2009) updated Alvarez, Cheibub, Limongi, and Przeworski (ACLP) Political and Economic Database. However, dichotomous measures of regime type, such as this one, are not free from criticism, and a considerable number of debates have compared the merits of the dichotomous with graded measures of political regime (e.g. Epstein et al., 2006; Munck and Verkuilen, 2002). To check the robustness of our results based on the ACLP dichotomous variable, I also use a graded measure of political regime taken from Polity IV, Regime (Marshall and Jaggers, 2010). As Acemoglu and Robinson (2006: 51) suggest, I normalize Polity scores (−10 to 10) to lie between 0 and 1, where 0 means full autocracy and 1 denotes full democracy. Democracy and Regime are highly correlated at 0.8.

The measure of Inequality is the Gini index of net income inequality. There are several datasets on income distribution across countries, but they suffer from the limitation of comparability across observations for broad cross-country research over relatively longer periods of time. Solt (2009) recently combined the United Nations University’s World Income Inequality Database and the Luxembourg Income Study and provided a standardized measure of inequality across countries and years, called the Standard World Income Inequality Database (SWIID). The SWIID contains the largest possible sample going back to 1960 and covering through 2008. The data are taken from the latest SWIID Version 3.0 released in 2010. The mean of this variable is 37.95 with the minimum value of 15.16 and the maximum value of 72.18.

Following the existing statistical models of globalization and protest (e.g. Arce and Bellinger, 2007; Arce and Kim, 2011; Kurtz, 2004), I include three essential control variables: Income, Growth, and Population. The data of these control variables are all taken from the Penn World Table Version 6.3 (Heston et al., 2009). One can generally expect that as people get richer, they tend to be politically risk-averse and deradicalized, and they also tend to eschew explicit conflicts (Przeworski et al., 2000). Alternatively, we can think of income as a proxy for modernization that mobilizes masses (Inglehart and Welzel, 2005). To control for this income effect, we include Income measured by real gross domestic product (GDP) per capita in 2000 constant price (chain series). Growth, the annual growth rate of real GDP in constant price, is also included to control for the possible relationship between overall economic performance and protest activity. Finally, larger populations may experience higher levels of extra-parliamentary protest activity because the pool of possible protest is larger (Collier et al., 2004; Powell, 1982). I include Population to control for the effect of population size. Both Income and Population are logged.

Results

Table 1 presents the estimates of the fixed effect negative binomial models¹² for the period from 1970 to 2008 for 116 countries (Appendix 1 presents the list of 116 countries of analysis). Model I is the estimated additive model of Model A in Figure 1 in which the globalization effect can be understood in the absence of domestic constraints, as inequality and democracy do not serve as modifying variables. Model II includes the three control variables; the estimates of Log(Income), Growth, and Log(Population) show the expected signs and are statistically significant at the conventional level. In fact, all the estimates of the control variables are consistent and highly significant across all the models. The negative and statistically significant effects of Globalization suggest that globalization without any domestic intervening factor generates depoliticization. Model III is the estimated multiplicative interaction with two modifying variables of Inequality and Democracy. The estimated conditional effect of globalization under democracy suggests that the relationship between globalization and protest under democracy depends on the level of inequality. As long as inequality is not high, globalization tends to increase protest in democracy. However, the conditional effect of globalization under dictatorship is always negative regardless of the level of inequality, showing that globalization entails depoliticization in dictatorship.¹³ After controlling for the income effect, economic growth, and the size of country, the results in Model III defy the unconditional globalization effects of predominant depoliticization shown in Models I and II. Democratic institutions and the egalitarian nature of society dampen down the demobilizing pressure from globalization, offering the possibility of repoliticization.

Table 1.

Estimates of the fixed effect negative binomial models.

	Model I	Model II	Model III	Model IV
Protest_t− ₁	0.0627*** (0.00395)	0.0598*** (0.00392)	0.0575*** (0.00395)	0.0599*** (0.00413)
Globalization	−0.00501* (0.00264)	−0.00853** (0.00355)	−0.0216* (0.0131)	0.0204 (0.0204)
Inequality	0.00766* (0.00459)	0.0129** (0.00518)	−0.0124 (0.0137)	0.0161 (0.0189)
Democracy	0.102 (0.0904)	0.0418 (0.0950)	0.413* (0.235)	1.769* (1.015)
Globalization × Inequality			0.000490* (0.000264)	−0.000405 (0.000431)
Globalization × Democracy			−0.00959*	−0.0594***
Inequality × Democracy			(0.00543)	(0.0223) −0.0308(0.0247)
Globalization × Inequality × Democracy				0.00112** (0.000515)
Log(Income)		0.197** (0.0765)	0.237*** (0.0792)	0.263*** (0.0803)
Growth		−0.0235***(0.00635)	−0.0246***(0.00641)	−0.0261***(0.00639)
Log(Population)		0.151*** (0.0383)	0.140*** (0.0388)	0.157*** (0.0393)
Constant	−1.111*** (0.233)	−4.536***(0.793)	−3.770*** (0.913)	−5.460*** (1.116)
Log-likelihood	−3305.490	−3149.155	−3144.580	−3140.042
N	3007	2929	2929	2929

Standard errors in parentheses.

p < 0.10, **p < 0.05, ***p < 0.01.

Model III, equivalent to Model B in Figure 1, however, is incomplete in that it does not take into account the linkage between inequality and democracy. Model IV estimates a full specification as shown in equation (2), including all the interaction terms, constitutive terms, and control variables. The results in Model IV demonstrate that globalization can generate repoliticization in democracy, as the estimated conditional effect of globalization is positive. However, in a dictatorship, the relationship between globalization and protest depends on the level of inequality because the estimated conditional effect can be either positive or negative.¹⁴ The findings from Model IV differ from those of Model III because, as discussed above, the specification of Model IV takes the nature of capitalist democracy (and capitalist dictatorship, for that matter) in which political institutions are fundamentally embedded in the socioeconomic condition of inequality.

However, one should be cautious about making direct inferences from the results shown in Table 1. Although estimated coefficients reveal the directions of association between the dependent and independent variables with some degree of uncertainty, it is difficult to interpret directly the coefficients from the negative binomial models because the effect of each estimated coefficient depends on the values of other independent variables and of the coefficient attached to those variables, as with other non-linear models (see Brambor et al., 2006; Cameron and Trivedi, 2013; Hilbe, 2011). In other words, the average marginal effects of Globalization also depend on F(·)′, that is, the values and coefficients of other covariates. To overcome these pitfalls, I perform a statistical simulation (see McCloskey and Ziliak, 1996). Following King et al.’s (2000) simulation method, we present the second set of results based on the statistical simulation.

One effective way to show both the size of the effect and its statistical significance is graphically. Based on Model IV in Table 1, Figure 2 visualizes the estimated conditional effects of globalization on protest under different political regimes at different levels of inequality. To show the effects of globalization conditional on the varying magnitudes of inequality, 18 predicted event counts of Protest are computed, setting Inequality at 18 different levels from 10 (low) to 58 (high). All other variables are held at their means. The dashed lines indicate that the connected estimates are not statistically significant at the conventional level, while the solid lines (with circles for democracy and exes for dictatorship) show that the estimated counts of Protest are significant at the 95 percent level.

Figure 2.

Estimated effects of globalization on protest at different levels of inequality and regime type.

From the graph in Figure 2, we can discern several patterns. As the curve of democracy is higher than the one of dictatorship, economic globalization in general tends to produce more protest movements under democracy than under dictatorship. This means that repoliticization is more dominant under democracy than under dictatorship. In addition, the magnitude of globalization effects on protest reduces as income inequality rises in both political regimes, as the declining slopes of the two curves show. More important, however, is the combination of inequality and political regime. As the statistically significant estimates show (solid curves), globalization generates repoliticization only in an egalitarian democracy. The results clearly confirm the major hypothesis: the more unequal the society, the less likely globalization is to generate protest. Beyond the average level of inequality, there is no systematic association between globalization and protest, implying that depoliticization might be rife. These findings are consistent with the theoretical discussions of capitalist democracy, suggesting that inequality plays a critical role in that social movements are empowered when civil society is relatively equal, but they are decapitated by increasing inequality when more material resources become concentrated in the hands of elites.

In a dictatorship, globalization largely results in trivial protest movements, as the magnitude of predicted counts of Protest is sufficiently small. Also, the rapidly decreasing slope of the curve indicates that, as in democracy, inequality generally tends to inhibit the possibilities of protest. At a high level of inequality, however, there is a positive association between globalization and protest, although the impacts are not large (the statistically significant estimates). This demonstrates that repoliticization appears to be somewhat evident in dictatorship when society is highly unequal, corroborating the findings by recent studies on distributive conflicts-cum-inequality under dictatorship, as discussed above. The results are novel because globalization plays different roles according to different political regimes and varying socioeconomic conditions.

To provide more substantive interpretations of the quantities of interest and to sharpen our findings, I now provide the combined effects of globalization, inequality, and political regimes, based on Model IV in Table 1. Figure 2 estimates the average globalization effects, but Table 2 presents the varying effects of globalization. The predicted event counts of Protest are computed for three different levels of Globalization (low, mean, and high), Inequality (low, mean, and high), and two types of political regimes (democracy and dictatorship). The levels of Globalization and Inequality are measured by one standard deviation centered on their means.¹⁵ The shaded areas in Table 2 point to the statistically significant estimates so that the systematic patterns are more visible.

Table 2.

Estimated effects of globalization on protest conditional on inequality and regime type.

Globalization	Inequality
	Low		Mean		High
	Democracy	Dictatorship	Democracy	Dictatorship	Democracy	Dictatorship
Low	4.005** (2.093)	4.640 (8.416)	3.103** (1.579)	2.906 (3.517)	2.529* (1.556)	1.927 (1.608)
Mean	1.495** (0.869)	1.184 (1.067)	1.263* (0.956)	0.816** (0.494)	1.120 (1.117)	0.593*** (0.250)
High	0.664 (0.649)	0.365** (0.178)	0.609 (0.766)	0.275*** (0.108)	0.585 (0.931)	0.218*** (0.095)

Entries are the estimated count of Protest, calculated using Clarify 2.1. The levels of Globalization and Inequality are measured by the one standard deviation (s) around its mean (µ) in the sample; Low = µ – s, Mean = µ, and High = µ + s. Standard errors in parentheses.

p < 0.10, **p < 0.05, ***p < 0.01.

These results in Table 2 confirm our previous findings that the size of the globalization effects is generally higher in a democracy than in a dictatorship (more repoliticization), inequality weakens the impacts of globalization on protest in both regimes, and repoliticization takes place in egalitarian democracies and highly inegalitarian dictatorships. In addition to these results consistent with the theoretical discussions, I also found unexpected results that the degree of globalization matters. In democracy, all the globalization effects disappear in the presence of a high level of globalization, as indicated by the non-significant estimates when the level of globalization is high under democracy. Deep globalization just overwhelms the efficacy of the existing socioeconomic condition regardless of the level of inequality. Egalitarian democratic societies become powerless under excessively powerful globalization pressures.

These unexpected results resonate with the politics of globalization in practice. Under limited globalization, democracies were able to establish the so-called ‘embedded liberalism’ in which the governments provided social insurance against globalization-related social risks (Ruggie, 1982). The Bretton Woods system signified a compromise between liberalism and socialism by restricting fully mobile capital across countries (Helleiner, 1994). From our main findings, we stress that one important premise is that the state need not listen to citizens’ voices if civil society is politically inactive, and hence the key for a successful system with limited globalization is the actual extra-parliamentary politics facilitated by the egalitarian socioeconomic condition. As globalization has become deeper through neoliberalization, however, this type of compromise is increasingly difficult to achieve. Rodrik (2011) advances a persuasive theory, arguing that ‘there is a fundamental tension between hyperglobalization and democratic politics’ (p. 189). By ‘democratic politics’, he means ‘mass politics’ in democracies in which ‘there is a high degree of political mobilization’ (Rodrik, 2007: 200). Facing the force of globalization, national governments have only two options to adopt: either ‘thin’ (limited globalization) with a healthy movement society that is likely to translate into decent social safety nets or ‘thick’ (hyperglobalization) with restricted democratic politics. The basic reasoning is straightforward: Hyperglobalization by nature requires shrinking domestic politics and insulating economic decision-making bodies from popular demands. Hence, the pressure of hyperglobalization significantly truncates a set of autonomous actions and choices for society to engage in protest, no matter how the material resources are distributed.

In contrast, hyperglobalization revitalizes protest activity in authoritarian institutions. The results demonstrate that in dictatorships, there is little systematic affinity between globalization and protest when globalization is limited, but as globalization becomes deeper, inequality brings civil society back in; its role is minimal but proactive. In addition, a further increase in globalization generates repoliticization regardless of income distribution. How does globalization entail divergent outcomes in different regimes? I believe that the same phenomena have different meanings under different political institutions, so it is not surprising that globalization is taken differently in democracy and dictatorship. Nondemocratic societies that sustain themselves principally through repression can be seen as politically inactive, devoid of social movements, which is confirmed by one of our core results. However, the deepening of globalization, especially in the context of high inequality, transforms the usually docile nondemocratic society into a contentious society. In this rare situation, people have ‘no other way out’ (Goodwin, 2001: 26). As mentioned in the theory section, hyperglobalization may open up ‘political opportunities’ for civil society that facilitate actual mobilizations by lowering the costs of collective action. This newly emerging sociopolitical environment created by the thick enmeshment into global markets, thus, enables resource-poor popular sectors to manifest their grievances and dissatisfaction with ongoing globalization processes.

As discussed above, the ACLP dichotomous measure of regime type is not free from criticism. To demonstrate the robustness of the results, I conduct an additional estimation with the alternative graded measure of regime based on Polity scores (Marshall and Jaggers, 2010). With the alternative measure of political regimes, the results remain qualitatively unchanged. To provide simulated estimates of the combined effects of globalization, inequality, and regimes, I recategorize Regime into autocracy, partial democracy, and full democracy, and in the simulation we set these regime categories at their average values.¹⁶ Table 3 presents the predicted event counts of Protest by three levels of globalization and inequality and by three regime-type categories. The results, again, demonstrate that our core findings remain robust.

Table 3.

Estimated effects of globalization on protest conditional on inequality and regime type: alternative measure of political regime (Polity IV).

Globalization	Inequality
	Low			Mean			High
	DEMO	PART	AUTO	DEMO	PART	AUTO	DEMO	PART	AUTO
Low	5.756* (4.033)	29.30 (40.70)	218.6 (543.9)	2.189** (0.956)	9.281 (8.276)	59.23 (110.1)	0.929*** (0.385)	3.272** (1.665)	17.59 (23.38)
Mean	0.886*** (0.286)	3.205** (1.645)	17.67 (24.03)	0.412** (0.222)	1.237*** (0.197)	5.695 (5.135)	0.213 (0.198)	0.533*** (0.105)	2.043** (1.151)
High	0.208 (0.181)	0.537*** (0.165)	2.107* (1.390)	0.116 (0.154)	0.253** (0.140)	0. 830** (0.404)	0.072 (0.143)	0.132 (0.122)	0.364** (0.200)

Entries are the estimated event counts of Protest, calculated using Clarify 2.1. AUTO denotes autocracy, PART denotes partial democracy, and DEMO denotes full democracy. The levels of Globalization and Inequality are measured by the one standard deviation (s) around its mean (µ) in the sample; Low = µ − s, Mean = µ, and High = µ + s. Standard errors are in the parentheses.

p < 0.10, **p < 0.05, ***p < 0.01.

Conclusion

In answering the question addressed at the beginning of the article as to whether economic globalization increases global protest, this study has attempted to move beyond the focus on the direct consequences of globalization. Highlighting the very nature of capitalist political regimes, I have formulated that repoliticization or depoliticization is not a direct consequence of economic globalization, but conditional on domestic conditions. The relationship between globalization and society’s collective reactions is profoundly constrained by inequality as well as the type of political regime. The main findings can be summarized as follows. A society’s distribution of income and political institutions modify the impacts of globalization on protest movements in that inequality diminishes the likelihood of protest while democracy increases it. The two domestic factors are pushing in opposite directions. The condition under which repoliticization is most likely to take place is an egalitarian democracy. Pace neoliberals as well as neo-Marxists, this result signifies that the structural dependence of civil society and the state on capital is not so binding that there is room for movement politics in democracies.

In turn, globalization-induced protest activity is negligible and rare in dictatorships, so that depoliticization is generally prevalent. Yet, there is the chance for civil society to venture into mobilization in dictatorships when dictators face citizens in highly unequal societies. I also found that hyperglobalization is intensely transformational. A country’s deep immersion in the global economy is a driving force behind the sociopolitical changes that are reshaping the existing patterns of extra-parliamentary politics in both regimes. The results show that increasing globalization beyond the average level blurs the distinctive efficacy of the domestic constraints, transforming usually active movement societies into depoliticized societies in democracies, but turning typically apathetic nondemocratic societies into politicized societies in dictatorships.

The findings point to clear future areas for research. First, my conclusions speak mostly to the effects of economic globalization and political regime as a whole, lumping different features of globalization into one index and differentiating regimes as mostly dichotomous. It is possible that two components of globalization, trade openness and capital mobility, differ qualitatively (Helleiner, 1994), entailing possibly different levels of protest activity. Moreover, recent anti-austerity protests suggest that the wave of uprisings may be synchronized by the dynamics of global capitalism. According to the world-systems approach, ‘anti-systemic movements’ occur when the domestic compensation system fails to function due to the crisis of capitalism (Arrighi et al., 1989). Thus, the external shocks that globalization generates versus a gradual pattern of globalization may matter because people’s income and status could change rapidly. Regarding democracy, the quality of political representation may matter in that a strong party system can incorporate social conflicts that would otherwise be expressed in the streets (Kim, 2010; McAdam and Tarrow, 2010). Party politics may have an inverse relationship with movement politics. Hence, future research should disaggregate the central variables of globalization and regime to advance a more refined empirical test.

Second, social welfare insurance may enhance or inhibit protest movements. A solid welfare state compensates people who are increasingly exposed to globalization-related social risks (Garrett, 1998; Hays, 2009; Kollmeyer, 2015; Lee et al., 2007) so that they could be less likely to engage in protest activity. The presence of compensatory institutions is also reinforced by inequality, as predicted by a typical political economy model suggesting that higher inequality generates a higher level of social spending (Meltzer and Richard, 1981). However, Moene and Wallerstein (2001) find that an egalitarian society is strongly associated with a generous social insurance program. From this perspective, combined with the results in this study, one can expect that stronger social welfare insurance is more likely to bring about repoliticization. Because the directions of causality remain unclear, future research should explore the importance of welfare regimes.

In closing, I want to emphasize one important implication from my study. In capitalist democracy, income inequality is fundamentally power inequality. There has been explosive interest in inequality recently. The media, scholars, and policymakers all talk about the problem of inequality, as shown by the intense debates sparked by Piketty’s (2014) magisterial study. However, the dangers of increasing inequality are mostly framed in terms of inefficiency, unfairness, diminishing democratic meritocracy, social immobility, and psychological depression. Many seem to assume that the condition is so intolerable that indignant people will hit the streets. As I demonstrated in this article, however, inequality does not automatically translate into contentious collective action. In contrast with the view of spontaneity, increasing inequality may block the possibility of extra-parliamentary activity. In the capitalist system, organizing protests necessarily requires material resources, and increasing inequality gives rise to increasing returns of power for the already wealthy. The outcome is the atomization and depoliticization of civil society, which, in turn, ostracizes a majority of the public from major public decisions. Indeed, Gilens’ (2014) disturbing findings of the United States reveal that the government only listens to those at the very top of the income distribution and utterly ignores policy demands from everyone else. An important lesson here is that civil society should possess capacity for collective mobilization so that citizens’ voices can be heard within the ruling bloc.

Globalization, inequality, and democracy are profoundly interconnected phenomena. To make sense of these complex realities, I agree with Donatella Della Porta’s (2015) proposal to ‘bring capitalism back into protest analysis’.

Footnotes

Appendix

Appendix 1.

Countries of analysis.

Albania	Algeria	Argentina	Armenia
Australia	Austria	Bangladesh	Barbados
Belarus	Belgium	Belize	Bolivia
Bosnia-Herzegovina	Botswana	Brazil	Bulgaria
Burkina Faso	Burundi	Cambodia	Cameroon
Canada	Chile	China	Colombia
Costa Rica	Croatia	Denmark	Dominican Republic
Ecuador	El Salvaador	Estonia	Ethiopia
Fiji	Finland	France	Gabon
Georgia	Germany	Ghana	Greece
Guatemala	Guinea	Guinea-Bissau	Guyana
Haiti	Honduras	Hungary	India
Indonesia	Iran	Ireland	Israel
Italy	Jamaica	Japan	Jordan
Kazakhstan	Kenya	Korea, South	Kyrgyzstan
Latvia	Lesotho	Macedonia	Madagascar
Malawi	Malaysia	Mali	Mauritania
Mauritius	Mexico	Moldova	Morocco
Mozambique	Namibia	Nepal	Netherlands
New Zealand	Nicaragua	Niger	Nigeria
Norway	Pakistan	Panama	Papua New Guinea
Paraguay	Peru	Philippines	Poland
Portugal	Romania	Rwanda	Senegal
Serbia and Montenegro	Sierra Leone	Slovak Republic	South Africa
Spain	Sri Lanka	Swaziland	Sweden
Switzerland	Tanzania	Thailand	Togo
Trinidad and Tobago	Tunisia	Turkey	Uganda
Ukraine	United Kingdom	United States	Uruguay
Venezuela	Yugoslavia	Zambia	Zimbabwe

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

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Economic globalization,inequality,and protest movements under capitalist political regimes,1970–2007

Abstract

Keywords

Introduction

The literature review: divergent globalization effects

Capitalist political regimes: inequality-regime nexus as domestic conditions

Testable implications

The estimation model and data

Results

Conclusion

Footnotes

Appendix

Funding

Notes

References