IDEAS home Printed from https://ideas.repec.org/p/ags/wbadwp/50299.html
   My bibliography  Save this paper

Explaining Agricultural Distortion Patterns : The Roles of Ideology, Inequality, Lobbying and Public Finance

Author

Listed:
  • Dutt, Pushan
  • Mitra, Devashish

Abstract

In this paper, we examine the political economy drivers of the variation in agricultural protection, both across countries and within countries over time. The paper starts by listing the key insights provided by both the theoretical and empirical literature on the political economy of trade policy formulation. We then set out a basic framework that allows us to put forth various testable hypotheses on the variation and evolution of agricultural protection. We find that both the political ideology of the government and the degree of income inequality are important determinants of agricultural protection. Thus, both the political-support-function approach as well as the median-voter approach can be used in explaining the variation in agricultural protection across countries and within countries over time. The results are consistent with the predictions of a model that assumes that labor is specialized and sector-specific in nature. Some aspects of protection also seem to be consistent with predictions of a lobbying model in that agricultural protection is negatively related to agricultural employment and positively related to agricultural productivity. Public finance aspects of protection also seem to be empirically important.

Suggested Citation

  • Dutt, Pushan & Mitra, Devashish, 2009. "Explaining Agricultural Distortion Patterns : The Roles of Ideology, Inequality, Lobbying and Public Finance," Agricultural Distortions Working Paper Series 50299, World Bank.
    • Handle: RePEc:ags:wbadwp:50299
    DOI: 10.22004/ag.econ.50299
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/50299/files/Explaining%20Agricultural%20Distortion%20Patterns-%20Agricultural%20Distortions%20Working%20Paper%2084_%20May%202009.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.50299?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kishore Gawande & Usree Bandyopadhyay, 2000. "Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 139-152, February.
    2. Robert C. Feenstra & Jagdish N. Bhagwati, 1982. "Tariff Seeking and the Efficient Tariff," NBER Chapters, in: Import Competition and Response, pages 245-262, National Bureau of Economic Research, Inc.
    3. Richard E. Caves, 1976. "Economic Models of Political Choice: Canada's Tariff Structure," Canadian Journal of Economics, Canadian Economics Association, vol. 9(2), pages 278-300, May.
    4. De Gorter, Harry & Swinnen, Johan, 2002. "Political economy of agricultural policy," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 36, pages 1893-1943, Elsevier.
    5. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," The World Bank Economic Review, World Bank, vol. 10(3), pages 565-591, September.
    6. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    7. Olper, Alessandro, 1998. "Political Economy Determinants of Agricultural Protection Levels in EU Member States: An Empirical Investigation," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 25(4), pages 463-487.
    8. Rodrik, Dani, 1986. "Tariffs, subsidies, and welfare with endogenous policy," Journal of International Economics, Elsevier, vol. 21(3-4), pages 285-299, November.
    9. Edward J. Ray, 1991. "Protection of Manufactures in the United States," Palgrave Macmillan Books, in: David Greenaway & Robert C. Hine & Anthony P. O’Brien & Robert J. Thornton (ed.), Global Protectionism, chapter 2, pages 12-36, Palgrave Macmillan.
    10. Olper, Alessandro, 2007. "Land inequality, government ideology and agricultural protection," Food Policy, Elsevier, vol. 32(1), pages 67-83, February.
    11. Pushan Dutt & Devashish Mitra, 2016. "Labor versus capital in trade-policy: The role of ideology and inequality," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 6, pages 109-119, World Scientific Publishing Co. Pte. Ltd..
    12. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December.
    13. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    14. Phillip McCalman, 2004. "Protection for Sale and Trade Liberalization: an Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 81-94, February.
    15. Pushan Dutt & Devashish Mitra, 2016. "Endogenous trade policy through majority voting: an empirical investigation," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 4, pages 67-93, World Scientific Publishing Co. Pte. Ltd..
    16. Anderson, Kym, 1995. "Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 43(2), pages 401-423, January.
    17. Gawande, Kishore & Hoekman, Bernard, 2006. "Lobbying and Agricultural Trade Policy in the United States," International Organization, Cambridge University Press, vol. 60(3), pages 527-561, July.
    18. Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998. "Explaining International and Intertemporal Variations in Income Inequality," Economic Journal, Royal Economic Society, vol. 108(446), pages 26-43, January.
    19. Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers Archive 11375, Iowa State University, Department of Economics.
    20. Mayer, Wolfgang, 1984. "Endogenous Tariff Formation," American Economic Review, American Economic Association, vol. 74(5), pages 970-985, December.
    21. Hiscox, Michael J., 2002. "Commerce, Coalitions, and Factor Mobility: Evidence from Congressional Votes on Trade Legislation," American Political Science Review, Cambridge University Press, vol. 96(3), pages 593-608, September.
    22. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," The World Bank Economic Review, World Bank, vol. 10(3), pages 565-591, September.
    23. Rodrik, Dani, 1995. "Political economy of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 28, pages 1457-1494, Elsevier.
    24. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications - Books, The World Bank Group, number 2611.
    25. Gawande, Kishore & Krishna, Pravin & Olarreaga, Marcelo, 2009. "What Governments Maximize and Why: The View from Trade," International Organization, Cambridge University Press, vol. 63(3), pages 491-532, July.
    26. Devashish Mitra & Dimitrios D. Thomakos & Mehmet A. Ulubaşoğlu, 2016. "“Protection For Sale” In A Developing Country: Democracy Vs. Dictatorship," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 9, pages 163-174, World Scientific Publishing Co. Pte. Ltd..
    27. Swinnen, Johan F. M. & Banerjee, Anurag N. & Gorter, Harry de, 2001. "Economic development, institutional change, and the political economy of agricultural protection: An econometric study of Belgium since the 19th century," Agricultural Economics, Blackwell, vol. 26(1), pages 25-43, October.
    28. Kishore Gawande & Pravin Krishna & Michael J. Robbins, 2006. "Foreign Lobbies and U.S. Trade Policy," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 563-571, August.
    29. Pushan Dutt & Devashish Mitra, 2016. "Political Ideology And Endogenous Trade Policy: An Empirical Investigation," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 5, pages 95-108, World Scientific Publishing Co. Pte. Ltd..
    30. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, University Library of Munich, Germany.
    31. Johan F. M. Swinnen, 1994. "A Positive Theory of Agricultural Protection," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(1), pages 1-14.
    32. By Kishore Gawande & Pravin Krishna & Marcelo Olarreaga, 2012. "Lobbying Competition Over Trade Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(1), pages 115-132, February.
    33. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    34. Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Measuring distortions to agricultural incentives, revisited," World Trade Review, Cambridge University Press, vol. 7(4), pages 675-704, October.
    35. Devashish Mitra, 2016. "Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 1, pages 3-21, World Scientific Publishing Co. Pte. Ltd..
    36. Jagdish N. Bhagwati, 1982. "Import Competition and Response," NBER Books, National Bureau of Economic Research, Inc, number bhag82-1.
    37. Magee,Stephen P. & Brock,William A. & Young,Leslie, 1989. "Black Hole Tariffs and Endogenous Policy Theory," Cambridge Books, Cambridge University Press, number 9780521377003, September.
    38. Ronald S. Saunders, 1980. "The Political Economy of Effective Tariff Protection in Canada's Manufacturing Sector," Canadian Journal of Economics, Canadian Economics Association, vol. 13(2), pages 340-348, May.
    39. Ronald Findlay & Stanislaw Wellisz, 1982. "Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare," NBER Chapters, in: Import Competition and Response, pages 223-244, National Bureau of Economic Research, Inc.
    40. Ito, Takatoshi & Krueger, Anne O. (ed.), 1993. "Trade and Protectionism," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226386683.
    41. Masayoshi Honma, 1993. "Japan's Agricultural Policy and Protection Growth," NBER Chapters, in: Trade and Protectionism, pages 95-114, National Bureau of Economic Research, Inc.
    42. Valenzuela, Ernesto & Wong, Sara & Sandri, Damiano, 2007. "Distortions to Agricultural Incentives in Ecuador," Agricultural Distortions Working Paper Series 48394, World Bank.
    43. Milner, Helen V. & Kubota, Keiko, 2005. "Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries," International Organization, Cambridge University Press, vol. 59(1), pages 107-143, January.
    44. Van Long, Ngo & Vousden, Neil, 1991. "Protectionist responses and declining industries," Journal of International Economics, Elsevier, vol. 30(1-2), pages 87-103, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Klomp, Jeroen, 2019. "Does government ideology shake or shape the public finances? Empirical evidence of disaster assistance," World Development, Elsevier, vol. 118(C), pages 118-127.
    2. Thomas Malang & Katharina Holzinger, 2020. "The political economy of differentiated integration: The case of common agricultural policy," The Review of International Organizations, Springer, vol. 15(3), pages 741-766, July.
    3. María Angélica Arbeláez & Sebastián Higuera & Roberto Steiner & Sandra Zuluaga, 2018. "Protecting “sensitive” agricultural products in Colombia : a political economy approach," Coyuntura Económica, Fedesarrollo, vol. 48(1-2), pages 153-205, December.
    4. Siudek, Tomasz & Zawojska, Aldona, 2011. "Relationship of Development and Fiscal Indicators with Agricultural Producer Support in the OECD Economies," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116009, European Association of Agricultural Economists.
    5. Tomasz Siudek & Aldona Zawojska, 2012. "How does general economy and agriculture sector performance influence farm producer support in the OECD countries?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 58(3), pages 101-118.
    6. Jeroen Klomp & Jakob de Haan, 2013. "Conditional Election and Partisan Cycles in Government Support to the Agricultural Sector: An Empirical Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(4), pages 793-818.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gawande, Kishore & Hoekman, Bernard, 2009. "Why Governments Tax or Subsidize Trade: Evidence from Agriculture," Agricultural Distortions Working Paper Series 50300, World Bank.
    2. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, University Library of Munich, Germany.
    3. Yasar, Mahmut, 2013. "Political Influence of Exporting and Import-Competing Firms: Evidence from Eastern European and Central Asian Countries," World Development, Elsevier, vol. 51(C), pages 154-168.
    4. Gawande, Kishore & Krishna, Pravin & Olarreaga, Marcelo, 2009. "What Governments Maximize and Why: The View from Trade," International Organization, Cambridge University Press, vol. 63(3), pages 491-532, July.
    5. Pokrivcak, Jan, 2007. "Economics and Political Economy of Regional Trade Agreements," Working Papers 7286, TRADEAG - Agricultural Trade Agreements.
    6. Kishore Gawande & Pravin Krishna & Michael J. Robbins, 2006. "Foreign Lobbies and U.S. Trade Policy," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 563-571, August.
    7. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    8. Olper, Alessandro & Raimondi, Valentina, 2008. "Consitutional Rules and Agricultural Policy Outcomes," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43870, European Association of Agricultural Economists.
    9. Imai, Susumu & Katayama, Hajime & Krishna, Kala, 2009. "Protection for sale or surge protection?," European Economic Review, Elsevier, vol. 53(6), pages 675-688, August.
    10. Imai, Susumu & Katayama, Hajime & Krishna, Kala, 2009. "Is protection really for sale? A survey and directions for future research," International Review of Economics & Finance, Elsevier, vol. 18(2), pages 181-191, March.
    11. Richard Damania & Per Fredriksson & Thomas Osang, 2004. "Collusion, Collective Action and Protection: Theory and Evidence," Public Choice, Springer, vol. 121(3), pages 279-308, February.
    12. Pushan Dutt & Devashish Mitra, 2016. "Endogenous trade policy through majority voting: an empirical investigation," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 4, pages 67-93, World Scientific Publishing Co. Pte. Ltd..
    13. Daron Djerdjian, 2010. "Economics versus politics in trade policy," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(2), pages 223-240, June.
    14. Giovanni Facchini & Johannes Van Biesebroeck & Gerald Willmann, 2006. "Protection for sale with imperfect rent capturing," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 845-873, August.
    15. Giacomo A. M. Ponzetto & Maria Petrova & Ruben Enikolopov, 2008. "The Dracula effect: voter information and trade policy," Economics Working Papers 1296, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2020.
    16. Giacomo Ponzetto, 2008. "Asymmetric information and trade policy," Economics Working Papers 1253, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2010.
    17. Pravin Krishna & Devashish Mitra, 2003. "Reciprocated Unilateralism in Trade Policy: An Interest-Group Approach," NBER Working Papers 9631, National Bureau of Economic Research, Inc.
    18. Rodrik, Dani, 1994. "What does the Political Economy Literature on Trade Policy (Not) Tell Us That We Ought to Know?," CEPR Discussion Papers 1039, C.E.P.R. Discussion Papers.
    19. Gawande, Kishore & Hoekman, Bernard, 2006. "Lobbying and Agricultural Trade Policy in the United States," International Organization, Cambridge University Press, vol. 60(3), pages 527-561, July.
    20. Nuno Limão & Arvind Panagariya, 2003. "Why is there an Anti-trade Bias in Trade Policy?," International Trade 0310003, University Library of Munich, Germany.

    More about this item

    Keywords

    Agricultural and Food Policy; International Relations/Trade;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:wbadwp:50299. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/wlrdbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.