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Political Economy of Distortions to Agricultural Incentives: Introduction and Summary

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  • Anderson, Kym

Abstract

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 Info

Paper provided by World Bank in its series Agricultural Distortions Working Paper with number 50306.

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Date of creation: May 2009
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Handle: RePEc:ags:wbadwp:50306

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Keywords: Distorted incentives; agricultural and trade policy reforms; national agricultural development; Political economy; agricultural price and trade policies; Agricultural and Food Policy; International Relations/Trade; F13; F14; Q17; Q18; F59; H20; N50; O13;

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  1. Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Measuring distortions to agricultural incentives, revisited," World Trade Review, Cambridge University Press, vol. 7(04), pages 675-704, October.
  2. Kym Anderson & Johanna Croser & Damiano Sandri & Ernesto Valenzuela, 2010. "Agricultural Distortion Patterns Since the 1950s: What Needs Explaining?," Centre for International Economic Studies Working Papers 2010-13, University of Adelaide, Centre for International Economic Studies.
  3. Beck, T.H.L. & Clarke, G. & Groff, A. & Keefer , P. & Walsh, P., 2001. "New tools in comparative political economy: The database of political institutions," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125517, Tilburg University.
  4. Olper, Alessandro & Raimondi, Valentina, 2008. "Consitutional Rules and Agricultural Policy Outcomes," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43870, European Association of Agricultural Economists.
  5. Anderson, Kym & Swinnen, Johan F.M., 2007. "Distortions to Agricultural Incentives in Europe’s Transition Economies," Agricultural Distortions Working Paper 48556, World Bank.
  6. Lloyd, Peter J. & Croser, Johanna L. & Anderson, Kym, 2009. "How do agricultural policy restrictions to global trade and welfare differ across commodities ?," Policy Research Working Paper Series 4864, The World Bank.
  7. Peter J. Lloyd & Johanna L. Croser & Kym Anderson, 2009. "Global Distortions to Agricultural Markets: New Indicators of Trade and Welfare Impacts, 1955 to 2007," School of Economics Working Papers 2009-13, University of Adelaide, School of Economics.
  8. Anderson, Kym & Lloyd, Peter J & Maclaren, Donald, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," CEPR Discussion Papers 6436, C.E.P.R. Discussion Papers.
  9. Orden, David & Blandford, David & Josling, Timothy E., 2009. "Determinants of Farm Policies in the United States, 1996-2008," Agricultural Distortions Working Paper 50297, World Bank.
  10. Cheryl Schonhardt-Bailey, 2006. "From the Corn Laws to Free Trade: Interests, Ideas, and Institutions in Historical Perspective," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262195437, December.
  11. Tyers,Rod & Anderson,Kym, 1992. "Disarray in World Food Markets," Cambridge Books, Cambridge University Press, number 9780521351058.
  12. De Gorter, Harry & Swinnen, Johan, 2002. "Political economy of agricultural policy," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 36, pages 1893-1943 Elsevier.
  13. Valenzuela, Ernesto & Kym Anderson, 2009. "Alternative Agricultural Price Distortions for CGE Analysis of Developing Countries, 2004 and 1980-84," GTAP Research Memoranda 2925, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  14. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications, The World Bank, number 2611, February.
  15. Anderson, Kym & Tyers, Rod, 1992. "Japanese rice policy in the interwar period: Some consequences of imperial self sufficiency," Japan and the World Economy, Elsevier, vol. 4(2), pages 103-127, September.
  16. Anderson, Kym & Croser, Johanna L., 2009. "Distribution of Agricultural NRAs across Countries and Products, 1955-84 and 1985-2007," Agricultural Distortions Working Paper 50307, World Bank.
  17. Martin Ravallion & Shaohua Chen & Prem Sangraula, 2007. "New Evidence on the Urbanization of Global Poverty," Population and Development Review, The Population Council, Inc., vol. 33(4), pages 667-701.
  18. Valenzuela, Ernesto & Wong, Sara & Sandri, Damiano, 2007. "Distortions to Agricultural Incentives in Ecuador," Agricultural Distortions Working Paper 48394, World Bank.
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