Why agricultural policies fail and two cases of policy failures in Albania

Purpose. The purpose of this study is to identify the causes of economic policy failure in general and agricultural policy failures in Albania in particular. At the same time, the very concept of policy failure is a matter of our interest. To achieve our goal, we have conducted a basic literature review. The most important aspect of interest in the study is the investigation of two cases where agricultural policy in Albania has failed. Methodology / approach. To conduct the study we use several methods: a review of general literature in relation to government policy failure; review of specific literature regarding farm size and cooperation; review of national policy or strategic documents regarding agricultural and rural development in general and farm size and cooperation in particular; review of national statistical evidence about farm size and cooperation in Albania, and data from international sources such as The Global Economy. Results. The study is based on the widely recognized evidence that the concept of failure is multidimensional and not uniquely defined. The study contributes to identifying and summarizing some of the main causes of policy failures. Government policies generally fail when intervention leads to inefficient allocation of resources and an overall decline in people’s well-being when they do not increase production, productivity, or revenue, or when society does not achieve the policy objectives set. Policy failures are generally related to the weakness of institutions. Institutions are weak when they fail to perform effectively the three basic functions that are commitment, coordination, and cooperation. In the case of agricultural policies in Albania, the study analyzes the extremely low level of collective action and the small size of farms, which has remained almost the same and fragmented throughout the 30–year period of economic and social transition. Strong institutions responsible for drafting and implementing legislation and developing policies, characterized by the professionalism and high performance of their staff, are the only guarantee for achieving the policy objectives for sustainable agricultural development and accelerating the process of Albania’s integration into the European Union. Originality / scientific novelty. The literature points out that: (1) government effectiveness, (2) rule of law and (3) weak control of corruption are the root causes of all policy failures, including agricultural policy failures. We analyze the data on these indicators for Albania and some other countries in the Western Balkans region and try to draw conclusions about their impact on the two policy failures we are interested in, which are the serious lack of collective action in the agricultural sector and the small size of farms in Albania. No previous research has been focused on agricultural policy failures, at least in Albania. Practical value / implications. The study may be useful for the discussion and evaluation of the impact of policies, and performance of related institutions in Albania. It emphasizes not only the need of reforming these bodies but also suggestions for future research on policies and their effectiveness in Albania and beyond.