Working Paper: CEPR ID: DP118
Authors: L. Alan Winters
Abstract: Industrial countries' agricultural policies involve extensive intervention in both domestic markets and international trade. This paper sketches some of the techniques of intervention commonly used and asesses their net effects in terms of higher prices and reduced welfare. It then argues that these deleterious policies have emerged from the interaction of an economic system which is constantly changing and social attitudes which abhor change and value rural life-styles. Within the broad boundaries defined by these forces, agricultural pressure groups, bureaucrats and politicians have considerable discretion, and their interaction typically leads to higher levels and increasingly complex systems of farm support. This outcome results not just from equilibrium in the "political market-place", but also from the process by which decisions on agriculture (and other issues) are taken.
Keywords: agriculture; protection; political economy
JEL Codes: 422; 713
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Agricultural policies (Q18) | higher prices (D49) |
| higher prices (D49) | reduced welfare (I38) |
| Agricultural policies (Q18) | reduced welfare (I38) |
| Agricultural pressure groups, bureaucrats, and politicians (Q18) | complex systems of farm support (P32) |
| Public attitudes that resist change (D72) | persistence of policies (E61) |
| Economic system's constant evolution (P19) | problems that policies attempt to solve (D78) |
| Economic costs of interventions (O22) | misallocation of resources (D61) |