Globalization and Willingness to Support the Poor in Developing Countries: An Experiment in India
45 Pages Posted: 15 Nov 2019
Date Written: November 6, 2019
Does an individual’s exposure to aspects of globalization impact their willingness to support income transfers to the poor? We hypothesize that the 'glitter' of foreign direct investment (FDI) in developing countries creates perceptions among relatively better-off citizens that the poor are less deserving of help, and reduces their financial support for the poor. Our experiment in India reveals that subjects share substantively less of their earnings with a real-world poor person in response to FDI, particularly when the foreign industry is producing in a low-skill, labor-intensive industry and the respondent self-identifies as ideologically conservative. This analysis combines experimental evidence with text analysis to assess the causal impact of FDI on redistribution towards the poor, mediated by ideology.
Keywords: FDI, redistribution, dictator game, India, poor, foreign investment, ideology, globalization
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