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Campaign Contributions and Agricultural Subsidies

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  • Lopez, Rigoberto A.

Abstract

This article examines the influence of campaign contributions on agricultural subsidies. Empirical results revealed that rent seeking works, i.e., campaign contributions of agricultural-related industries influence agricultural subsidies in the manner they best serve contributors' economic interests. Eliminating campaign contributions would significantly decrease agricultural subsidies, hurt farm groups, benefit consumers and taxpayers, and increase social welfare by approximately $5.5 billion. Although contributions are not the only determinants of agricultural subsidies, investment returns to farm PAC contributors are quite high ($1 in contributions brings about $2,000 in policy transfers). In fact, the results are in sharp contrast to the "truthful contributions" assumption of the Grossman-Helpman model.

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Bibliographic Info

Paper provided by University of Connecticut, Food Marketing Policy Center in its series Research Reports with number 25223.

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Date of creation: 2001
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Handle: RePEc:ags:uconnr:25223

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Keywords: Agricultural and Food Policy; Political Economy;

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References

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  1. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
  2. Gardner, Bruce L, 1992. "Changing Economic Perspectives on the Farm Problem," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 62-101, March.
  3. Esty, Daniel C & Caves, Richard E, 1983. "Market Structure and Political Influence: New Data on Political Expenditures, Activity, and Success," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 24-38, January.
  4. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
  5. Lopez, Rigoberto A & Pagoulatos, Emilio, 1996. "Trade Protection and the Role of Campaign Contributions in U.S. Food and Tobacco Industries," Economic Inquiry, Western Economic Association International, vol. 34(2), pages 237-48, April.
  6. Beghin, John C. & Kherallah, Mylene, 1994. "Political Institutions and International Patterns of Agricultural Protection," Staff General Research Papers 1602, Iowa State University, Department of Economics.
  7. Honma, Masayoshi & Hayami, Yujiro, 1986. "Structure of agricultural protection in industrial countries," Journal of International Economics, Elsevier, vol. 20(1-2), pages 115-129, February.
  8. Mueller, Dennis C & Stratmann, Thomas, 1994. " Informative and Persuasive Campaigning," Public Choice, Springer, vol. 81(1-2), pages 55-77, October.
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Cited by:
  1. Allcott, Hunt & Lederman, Daniel & Lopez, Ramon, 2006. "Political institutions, inequality, and agricultural growth : the public expenditure connection," Policy Research Working Paper Series 3902, The World Bank.
  2. Rigoberto A. Lopez & Ibrahima Hathie, 2002. "Is Protection for Sale in U.S. Food Industries?," Food Marketing Policy Center Research Reports 069, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  3. Gawande, Kishore & Hoekman, Bernard, 2006. "Lobbying and Agricultural Trade Policy in the United States," International Organization, Cambridge University Press, vol. 60(03), pages 527-561, July.
  4. Per G. Fredriksson & Khawaja A. Mamun, 2014. "Tobacco Politics and Electoral Accountability in the United States," Public Finance Review, , vol. 42(1), pages 4-34, January.
  5. Rigoberto A. Lopez & Xenia Matschke, 2006. "Food Protection for Sale," Review of International Economics, Wiley Blackwell, vol. 14(3), pages 380-391, 08.

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