Using a unique methodology for identifying unauthorized immigrants across counties in the state of Georgia in the United States, we show that an increase in unauthorized immigrants is associated with natives holding more restrictive views against social welfare provision. We also find a positive relationship between the population share of unauthorized immigrants and the share of votes going to the Republicans in elections. Furthermore, we show that this effect is more pronounced for the presence of unauthorized immigrants than Hispanics; is stronger in counties with higher median household income; and is substantively larger in U.S. Congressional elections.

What explains variation in individual preferences for foreign economic engagement in emerging economies? To answer that question, we construct a new theory about the identity of economic partner countries. Two dimensions of peoples' beliefs about partner countries matter: their perceptions of political side-taking by the partner country and their overall favorability towards the partner country. New and original data from a panel survey fielded in Tunisia to a large, national sample supports the argument. An experiment that varies the potential economic partner the United States, France, or Qatar reveals that Qatar's partisan meddling in the domestic politics of Tunisia dramatically shapes Tunisians' willingness to engage economically with Qatar relative to the United States and France. Moreover, Tunisians' generally favorable attitudes towards France lead to greater support for economic engagement with France than with the United States, even though both countries take a similar partisan stance in Tunisian politics. As the rise of new aid donors, investors, and trade partners create new choices in economic partners, the theory and findings contained in this article are critical to understanding mass preferences about open economic engagement in the developing world and beyond.

Because stock market investments are bets on future events, which are partly unknowable and unpredictable, the allocation of global capital flows are not only determined by observable economic fundamentals, but – as studies in behavioural finance and economic sociology have demonstrated - also by imaginations and social conventions that investors have to use in order to guess and anticipate future trends. While the use of heuristic devices (such as narratives, concepts, or classifications) are essential to structure the analyses of prospective investors, they also inhibit the risk of distorting the perception of economic realities and thus, ultimately, the flows of global capital. Emerging markets investments, which have become a central issue of contemporary global political economy, are no exception to such dynamics. Exploiting the fact that Goldman Sachs’ choice to market Brazil, Russia, India and China as the ‘shining stars’ among emerging markets was highly arbitrary and apparently unrelated to the countries’ relative growth prospects, we show how the effective promotion of the imaginary of BRICs captured the attention and distorted the investment decisions of global investors: Based on a difference-in-differences research design, we find that up to one half of the total portfolio equity inflows to the BRICs economies in the period from 2002 to 2007 can be explained by the BRIC effect. To test the robustness of our finding, we also explicitly model the heterogeneity of the treatment effect over time using data from Google’s NGram Viewer, which strongly confirms that the BRIC effect increased as the idea was more widely disseminated among global investors. Overall, we find very strong evidence that ideas can move money in global capital markets.

This paper reexamines the dominant view that fiscal austerity does not negatively affect political support for the government. It shows that previous studies underestimate the negative effect of fiscal consolidations on government support because they ignore the strategic behavior of the actors involved. In particular, we argue that voters can send signals to the government to which the government responds strategically. We show cases when voters sincerely or insincerely punish the government to make them stop consolidation. To address the empirical challenges that arise from this strategic behavior, we compile an original dataset of annual vote intentions and estimate the impact of fiscal consolidation on government political support using instrumental variables regressions. Our results show that fiscal austerity has a substantial negative effect on vote intentions for government parties. The electoral risk that is associated with fiscal consolidations, therefore, is substantially larger than proposed by previous studies. These findings raise doubts about the political foundations of the so-called ‘expansionary fiscal contractions’ thesis, which is a main theoretical source of the current crisis resolution strategy in Europe.