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Exports vs. investment: How political discourse shapes popular support for external imbalances

Type of publication Peer-reviewed
Publikationsform Original article (peer-reviewed)
Author Ferrara Federico Maria, Stefan Haas Jörg, Peterson Andrew, Sattler Thomas,
Project Contingent signals: The political preconditions for successful economic stabilisation
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Original article (peer-reviewed)

Journal Socio-Economic Review
Page(s) 1 - 20
Title of proceedings Socio-Economic Review
DOI 10.1093/ser/mwab004

Open Access


AbstractThe economic imbalances that characterize the world economy have unequally distributed costs and benefits. That raises the question of how countries could run long-term external surpluses and deficits without significant opposition against the policies that generate them. We show that political discourse helps to secure public support for these policies and the resulting economic outcomes. First, a content analysis of 32 000 newspaper articles finds that the dominant interpretations of current account balances in Australia and Germany concur with very distinct perspectives: external surpluses are seen as evidence of competitiveness in Germany, while external deficits are interpreted as evidence of attractiveness for investments in Australia. Second, survey experiments in both countries suggest that exposure to these diverging interpretations has a causal effect on citizens’ support for their country’s economic strategy. Political discourse, thus, is crucial to provide the societal foundation of national growth strategies.