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Predatory Versus Productive Government: The Case of U.S. Agricultural Policies

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  • Rausser, Gordon C.

Abstract

This essay will argue that agricultural policy in the United States has led to both the enhancement of efficiency through "productive policies" and the transfer of wealth and income to special interests through redistributive or "predatory policies." These two activities can be labeled as PESTs and PERTs. PEST policies, or political-economic-seeking transfers, are meant to redistribute wealth from one social group to another and are not explicitly concerned with efficiency. In contrast, PERTs, or political-economic resource transactions, are intended to correct market failures or to provide public goods; these policies have neutral distributional effects, at least in design. A review of the history of public policy in agriculture reveals not only tension between the PERT and PEST roles of the public sector, but also some coordination between these two types of activities. As different interest groups pressure the political process, the government trades off PESTs and PERTs in its attempts to acquire, balance, and secure political power. At times this has led to combinations of programs that appear incoherent. In such a world, the challenge for economists is to design and advocate policies that are both economically productive and politically sustainable.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 724.

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Date of creation: 01 Jan 1992
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Handle: RePEc:isu:genres:724

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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  1. Rausser, Gordon C. & Lapan, Harvey E, 1980. "Natural resources, goods, bads and alternative institutional frameworks," CUDARE Working Paper Series 89, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  2. Rausser, Gordon C. & de Gorter, Harry, 1988. "Endogenizing policy in models of agricultural markets," CUDARE Working Paper Series 482, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  3. Rausser, Gordon C, 1974. "Technological Change, Production, and Investment in Natural Resource Industries," American Economic Review, American Economic Association, vol. 64(6), pages 1049-59, December.
  4. Becker, Gary S., 1985. "Public policies, pressure groups, and dead weight costs," Journal of Public Economics, Elsevier, vol. 28(3), pages 329-347, December.
  5. Gordon Rausser & Richard Howitt, 1975. "Microeconomics: Stochastic Control of Environmental Externalities," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 4, number 2, pages 271-292 National Bureau of Economic Research, Inc.
  6. Zusman, Pinhas, 1976. "The Incorporation and Measurement of Social Power in Economic Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 17(2), pages 447-62, June.
  7. Bhagwati, Jagdish N, 1982. "Directly Unproductive, Profit-seeking (DUP) Activities," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 988-1002, October.
  8. Rausser, Gordon C, 1982. "Political economic markets: PERTS and PESTS in food and agriculture," CUDARE Working Paper Series 231, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  9. Gardner, Bruce L, 1987. "Causes of U.S. Farm Commodity Programs," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 290-310, April.
  10. 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.
  11. Foster, William E. & Rausser, Gordon C., 1990. "Price-distorting compensation serving the public interest," CUDARE Working Paper Series 567, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  12. Rausser, Gordon C. & Chalfant, James A. & Love, H. Alan & Stamoulis, Kostas G., 1986. "Macroeconomic linkages, taxes, and subsidies in the U.S. agricultural sector," CUDARE Working Paper Series 393, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  13. Hochman, Eithan & Zilberman, David, 1978. "Examination of Environmental Policies Using Production and Pollution Microparameter Distributions," Econometrica, Econometric Society, vol. 46(4), pages 739-60, July.
  14. Love, H. Alan & Foster, William E., 1990. "Commodity Program Slippage Rates For Corn And Wheat," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(02), December.
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