Working Paper: CEPR ID: DP9221
Authors: Kym Anderson; Gordon Rausser; Johan Swinnen
Abstract: The agricultural and food sector is an ideal case for investigating the political economy of public policies. Many of the policy developments in this sector since the 1950s have been sudden and transformational, while others have been gradual but persistent. This article reviews and synthesizes the literature on trends and fluctuations in market distortions and the political-economy explanations that have been advanced. Based on a rich global data set covering a half-century of evidence on commodities, countries, and policy instruments, we identify hypotheses that have been explored in the literature on the extent of market distortions and the conditions under which reform may be feasible.
Keywords: distortions to agricultural markets; economics of farm and food politics
JEL Codes: D72; D78; F13; F14; N50; Q17; Q18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Government interventions in agricultural markets (Q13) | Significant price distortions (P22) |
| Significant price distortions (P22) | Negative impact on producers and consumers (F61) |
| High-income countries' agricultural policies (Q18) | Lower international prices (F16) |
| Lower international prices (F16) | Depressed earnings for farmers in developing countries (O13) |
| Agricultural protectionism in developed nations (Q17) | Harm to agricultural producers in lower-income countries (F69) |
| Political economy of agricultural policy (Q18) | Influenced by income distribution and political power of interest groups (D72) |
| Governments supporting sectors with comparative disadvantages (O25) | Tendency for counter-cyclical policies (E32) |
| Improving governance and reducing corruption (H57) | Facilitate more effective agricultural policy reforms (Q18) |