Working Paper: CEPR ID: DP4526
Authors: Kym Anderson; Richard Damania; Lee Ann Jackson
Abstract: A common-agency lobbying model is developed to help understand why North America and the European Union have adopted such different policies towards genetically modified food. Our results show that when firms (in this case farmers) lobby policy-makers to influence standards and consumers and environmentalists care about the choice of standard, it is possible that increased competition from abroad can lead to strategic incentives to raise standards, not just lower them as shown in earlier models. This theoretical proposition is supported by numerical results from a global general equilibrium model of GM adoption in America without and with an EU moratorium.
Keywords: GMOs; political economy; regulation of standards; trade policy
JEL Codes: F13; O33; O38; Q17; Q18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased competition from abroad (F69) | strategic incentives for countries to raise standards (F55) |
| farmers in countries with a comparative advantage in GM technology (Q16) | lobby for lax regulations (K23) |
| farmers in countries with a comparative disadvantage (F14) | lobby for stricter standards (L49) |
| producer lobbying (D72) | influences government policy decisions (H10) |
| interplay between consumer preferences and producer interests (D10) | leads to divergent regulatory approaches across countries (L59) |