The Doha Talks and the Bargaining Surplus in Agriculture
The Doha Round has been slow to achieve a reduction in the level of agricultural protection. This remains the case notwithstanding the substantial economic benefits that would arise from a more liberal agricultural trading regime. We provide one explanation for this slowness using a simple bargaining model. We demonstrate that the bargaining countries received a substantial fiscal gain from reducing government expenditures in the run-up to the Uruguay Round. This fiscal pressure was sufficient to block rent seekers who wanted farm payments to continue. Since the Uruguay Round these fiscal constraints have been reduced and the same pressure to reach a bargain and control rent-seeking behaviour is not present in the Doha Round.
Volume (Year): 08 (2007)
Issue (Month): 2 ()
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- Peter Nedergaard, 2006. "Market Failures and Government Failures: A Theoretical Model of the Common Agricultural Policy," Public Choice, Springer, vol. 127(3), pages 385-405, June.
- Carsten Daugbjerg & Alan Swinbank, 2007. "The Politics of CAP Reform: Trade Negotiations, Institutional Settings and Blame Avoidance," Journal of Common Market Studies, Wiley Blackwell, vol. 45, pages 1-22, 03.
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