Embedded liberalism, economic nationalism, or Welfare Chauvinism? Experimental evidence on policy preferences in tough times

Three policy paradigms have emerged to address globalisation-induced economic vulnerabilities: (1) Embedded Liberalism (EL), (2) Economic Nationalism (EN), and (3) Welfare Chauvinism (WC). We investigate which of these policy paradigms is better equipped to address citizens' concerns in times of economic crises, by assessing which policies citizens prefer in response to negative economic shocks: (1) social expenditure and redistribution via taxation, (2) closing domestic markets to foreign products and people, or (3) social expenditure and redistribution via taxation and strict migration policies. Our key tests involves vignette experiments in the three largest EU economies: France, Germany, and Italy (N = 11, 000). We find that voters are more likely to support politicians who increase welfare spending. Follow-up conjoint experiments, which investigate specific attributes of social expenditure and redistribution, indicate strong support for social investment, progressive taxation, and extending social expenditure to both natives and foreigners. However, we show that right-wing respondents are significantly less likely to favour social expenditure for foreigners compared to centrist and left-wing ones. Our micro-foundational evidence suggests that, while politicians who advocate redistribution in tough times will enjoy a significant political advantage, citizens are ideologically divided as to whether welfare spending should come with an exclusionary component or not.