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Impact of Economic Development on Commodity and Public Research Policies in Agriculture

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  • Harry De Gorter
  • Johan F.M. Swinnen

Abstract

A political‐economic explanation is provided for the existence of commodity policy and research expenditures in agriculture. Structural economic characteristics such as pre‐policy endowment incomes, deadweight costs, and distributional impact of research are found to determine the levels of commodity price subsidies (taxes in developing countries) and underinvestment in research in all countries. Unequal benefits from research generate two types of interaction effects: political interaction effects, whereby commodity policy reduces research‐induced inequality, resulting in more research; and economic interaction effects, whereby deadweight costs per unit transfer decline with research. The latter effect generates increased levels of political optimal research investment.

Suggested Citation

  • Harry De Gorter & Johan F.M. Swinnen, 1998. "Impact of Economic Development on Commodity and Public Research Policies in Agriculture," Review of Development Economics, Wiley Blackwell, vol. 2(1), pages 41-60, February.
    • Handle: RePEc:bla:rdevec:v:2:y:1998:i:1:p:41-60
    DOI: 10.1111/1467-9361.00027
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    Cited by:

    1. Aparajita Goyal & John Nash, 2017. "Reaping Richer Returns [Obtenir de meilleurs résultats]," World Bank Publications - Books, The World Bank Group, number 25996, December.
    2. Henning, Christian H. C. A., 2015. "Modeling and evaluation of political processes: A new quantitative approach," Working Papers of Agricultural Policy WP2015-01, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.
    3. Swinnen, Johan F. M. & Gorter, Harry de & Rausser, Gordon C. & Banerjee, Anurag N., 2000. "The political economy of public research investment and commodity policies in agriculture: an empirical study," Agricultural Economics, Blackwell, vol. 22(2), pages 111-122, March.
    4. Mogues, Tewodaj, 2012. "What determines public expenditure allocations?: A review of theories, and implications for agricultural public investments," IFPRI discussion papers 1216, International Food Policy Research Institute (IFPRI).

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