Economic Globalization, Income Inequality, and Political Efficacy, 1970-2008

We analyze whether the suggestion that economic globalization leads to lower perceived external political efficacy is true. Informed by a rational choice perspective, we theorize that the negative impact of economic globalization on political efficacy is stronger among groups that should be more aware of the political ramifications of economic globalization. Formulating mutually exclusive hypotheses, we distinguish this theory from theories focusing on income inequality instead of economic globalization (resource theory and relative power theory). Corroborating our theorizing on the importance of political awareness, multi-level analyses of macro-level data added to individual-level surveys (1970-2008) demonstrate that the gap in political efficacy between those with more and those with less education and political knowledge is smaller when levels of economic globalization are higher; the negative impact of economic globalization on political efficacy is stronger among the former groups. We relate our findings to prior studies and provide suggestions for further research.