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The microeconomics of the developmental paradox: on the political economy of food price policy

  • Barrett, Christopher B.

A longstanding puzzle in comparative economics is the 'developmental paradox', the tendency for government support for agriculture to increase with national income and to decrease with the proportion of economic activity and of the population in agriculture. This paper offers a microeconomic explanation for that puzzle. It establishes analytically the microeconomic basis for coalition alignments with respect to food price policy, then numerically simulates the comparative static effects of alternative food policies on coalition structure. A parsimonious household model applied to a heterogeneously endowed society demonstrates how variation in individual welfare effects might beget distinct coalitions in the debate over food price policy and how those policies are inextricably linked to land, population, and technology policies in food agriculture. Moreover, coalition alignments on particular policy debates are path-dependent. In particular, food price policy creates its own political support. © 1999 Elsevier Science B.V. All rights reserved.

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Article provided by Blackwell in its journal Agricultural Economics.

Volume (Year): 20 (1999)
Issue (Month): 2 (March)
Pages: 159-172

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Handle: RePEc:eee:agecon:v:20:y:1999:i:2:p:159-172
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  1. Barrett, Christopher B., 1997. "Liberalization and food price distributions: ARCH-M evidence from Madagascar," Food Policy, Elsevier, vol. 22(2), pages 155-173, April.
  2. Lilyan E. Fulginiti & Jason F. Shogren, 2005. "Agricultural Protection in Developing Countries," Others 0502010, EconWPA.
  3. Satterthwaite, Mark Allen, 1975. "Strategy-proofness and Arrow's conditions: Existence and correspondence theorems for voting procedures and social welfare functions," Journal of Economic Theory, Elsevier, vol. 10(2), pages 187-217, April.
  4. Swinnen, Jo & van der Zee, Frans A, 1993. "The Political Economy of Agricultural Policies: A Survey," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 20(3), pages 261-90.
  5. Barrett, Christopher B., 1996. "On price risk and the inverse farm size-productivity relationship," Journal of Development Economics, Elsevier, vol. 51(2), pages 193-215, December.
  6. 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.
  7. Hans Binswanger, 1980. "Attitudes toward risk: Experimental measurement in rural india," Artefactual Field Experiments 00009, The Field Experiments Website.
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  9. Pitt, Mark M, 1983. "Food Preferences and Nutrition in Rural Bangladesh," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 105-14, February.
  10. David, Cristina C & Huang, Jikun, 1996. "Political Economy of Rice Price Protection in Asia," Economic Development and Cultural Change, University of Chicago Press, vol. 44(3), pages 463-83, April.
  11. Budd, John W, 1993. "Changing Food Prices and Rural Welfare: A Nonparametric Examination of the Cote d'Ivoire," Economic Development and Cultural Change, University of Chicago Press, vol. 41(3), pages 587-603, April.
  12. Epstein, L, 1975. "A Disaggregate Analysis of Consumer Choice under Uncertainty," Econometrica, Econometric Society, vol. 43(5-6), pages 877-92, Sept.-Nov.
  13. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
  14. Christopher B. Barrett & Paul A. Dorosh, 1996. "Farmers' Welfare and Changing Food Prices: Nonparametric Evidence from Rice in Madagascar," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 656-669.
  15. Krueger, Anne O & Schiff, Maurice & Valdes, Alberto, 1988. "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review, World Bank Group, vol. 2(3), pages 255-71, September.
  16. Gibbard, Allan, 1973. "Manipulation of Voting Schemes: A General Result," Econometrica, Econometric Society, vol. 41(4), pages 587-601, July.
  17. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
  18. Sandmo, Agnar, 1971. "On the Theory of the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 61(1), pages 65-73, March.
  19. Timmer, C Peter, 1981. "Is There "Curvature" in the Slutsky Matrix?," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 395-402, August.
  20. Turnovsky, Stephen J & Shalit, Haim & Schmitz, Andrew, 1980. "Consumer's Surplus, Price Instability, and Consumer Welfare," Econometrica, Econometric Society, vol. 48(1), pages 135-52, January.
  21. 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.
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