Political Economy of Distortions to Agricultural Incentives

During the 1960s and 1970s most developing countries imposed anti-agricultural policies, while many high-income countries restricted agricultural imports and subsidized their farmers. Both sets of policies inhibited economic growth and poverty alleviation in developing countries, while doing little to assist small farmers in high-income countries. Since the 1980s, however, many developing countries began to reduce the anti-agricultural bias of sectoral policies, and from the early 1990s the European Union began to move away from price supports to more-direct forms of farm income payments. This paper summarizes a forthcoming book that seeks to explain this evolving pattern of distortions to incentives conceptually and econometrically by making use of new political economy theory and a new globally comprehensive and consistent set of estimates of the changing extent of annual distortions over the past half-century. The distortion estimates involve more than 70 products that cover around 70 percent of the value of agricultural output in each of 75 countries that together account for over 90 percent of the global economy, and they expose the contribution of the various policy instruments (both farm and non-farm) to the net distortion to farmer incentives. Such a widespread coverage of countries, products, years and policy instruments has allowed this collection of studies to test a wide range of hypotheses suggested by the new political economy literature, including the importance of institutions. As a set it sheds much new light on the underlying forces that have affected incentives facing farmers in the course of national and global economic and political development, and hence on how those distortions might change in the future - or be changed by concerted actions to offset political pressures from traditionally powerful vested interests.

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Bibliographic Details
Main Author: Anderson, Kym
Format: Working Paper biblioteca
Language:English
en_US
Published: World Bank, Washington, DC 2009-05
Subjects:AGREEMENT ON AGRICULTURE, AGRICULTURAL AGREEMENT, AGRICULTURAL DEVELOPMENT, AGRICULTURAL ECONOMICS, AGRICULTURAL EXPORT, AGRICULTURAL EXPORT SUBSIDIES, AGRICULTURAL GOODS, AGRICULTURAL IMPORTS, AGRICULTURAL INCENTIVES, AGRICULTURAL MARKETS, AGRICULTURAL OUTPUT, AGRICULTURAL POLICIES, AGRICULTURAL POLICY, AGRICULTURAL PRICE, AGRICULTURAL PRICES, AGRICULTURAL PRICING, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTIVITY, AGRICULTURAL PROTECTION, AGRICULTURAL PROTECTIONISM, AGRICULTURAL RESEARCH, AGRICULTURAL SECTOR, AGRICULTURAL SECTORS, AGRICULTURAL TARIFFS, AGRICULTURAL TRADE, AGRICULTURAL TRADE POLICIES, AGRICULTURAL TRADE POLICY, AGRICULTURE, ALLOCATIVE EFFICIENCY, BARGAINING, BARGAINING POWER, BENCHMARK, BORDER MEASURES, CAPITAL MARKETS, COLLECTIVE ACTION, COMMERCIAL GROUPS, COMMODITIES, COMPARATIVE ADVANTAGE, CONSUMERS, COTTON, CROPS, DECENTRALIZATION, DEMOCRACIES, DEMOCRACY, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC PRICE, DOMESTIC PRICES, ECONOMETRIC ANALYSES, ECONOMETRICS, ECONOMIC ANALYSIS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC THEORY, EMPLOYMENT, EXCHANGE RATE, EXCHANGE RATES, EXPORT, EXPORTS, FARM, FARM INCOME, FARM INCOMES, FARM INPUTS, FARM PRICES, FARM PRODUCTS, FARM SUBSIDIES, FARMERS, FARMS, FEED, FINANCIAL INSTITUTIONS, FOOD PRICES, FOOD PRODUCTION, FOREIGN EXCHANGE, FREE TRADE, GDP, GENERAL EQUILIBRIUM, GLOBAL ECONOMY, GLOBAL MARKETS, GOVERNANCE INDICATORS, GOVERNMENT INTERVENTION, GOVERNMENT REGULATION, GRAIN, HOUSEHOLDS, IMPORT BARRIERS, IMPORT DUTIES, IMPORT TARIFFS, IMPORTS OF RICE, INCOME GROUP, INDUSTRIALIZATION, INTERNATIONAL AGREEMENTS, INTERNATIONAL MARKETS, INTERNATIONAL TRADE, LIVESTOCK, LIVESTOCK PRODUCTS, MARKET ACCESS, MARKET FAILURES, MARKET STRUCTURES, MIDDLE-INCOME COUNTRIES, MILK, MULTILATERAL TRADE, NATIONAL ECONOMY, OUTPUTS, PER CAPITA INCOME, POLITICAL ARENA, POLITICAL ECONOMY, POLITICAL INSTITUTIONS, POLITICAL POWER, POLITICAL REGIME, POLITICAL REGIMES, POLITICAL SYSTEM, PORK, PORTFOLIO, PORTFOLIO DIVERSIFICATION, PORTFOLIOS, POULTRY, POVERTY ALLEVIATION, PRICE DISTORTIONS, PRIVATE SECTOR, PUBLIC FINANCE, PUBLIC GOOD, PUBLIC POLICIES, PUBLIC POLICY, QUANTITATIVE RESTRICTIONS, REAL WAGES, REDISTRIBUTIVE TAXATION, REFORM PROGRAM, REGIONAL TRADE, RICE PRICES, RURAL AREAS, SUGAR, TAX, TAXATION, TRADE AGREEMENT, TRADE AGREEMENTS, TRADE LIBERALIZATION, TRADE NEGOTIATIONS, TRANSITION COUNTRIES, TRANSITION ECONOMIES, URBANIZATION, URUGUAY ROUND, VOLATILITY, VOLUME, WAGES, WEALTH, WORLD ECONOMY, WORLD PRICES, WORLD TRADE, WORLD TRADE ORGANIZATION, WTO,
Online Access:http://documents.worldbank.org/curated/en/267471468346438258/Political-economy-of-distortions-to-agricultural-incentives-introduction-and-summary
https://hdl.handle.net/10986/28164
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