IDEAS home Printed from https://ideas.repec.org/p/ags/aaea09/49313.html
   My bibliography  Save this paper

Democracy and Agricultural Protection: Parametric and Semi-parametric Matching Estimates

Author

Listed:
  • Olper, Alessandro
  • Falkowski, Jan
  • Swinnen, Johan F.M.

Abstract

We estimate the effect of democratic transitions on agricultural protection in a sample of 74 developing and developed countries, observed in the 1955-2005 period. We employ both differences-in-differences regressions and semi-parametric matching methods, exploiting the time series and cross-sectional variation in the data. Our semi-parametric matching estimates show that parametric methods might underestimate the true effect of democracy on agricultural protection. We find a strong increase in agricultural protection (reduce in taxation) after a country transition to democracy. Specifically a democratic transition increases agricultural protection by about 9 percent points. However, the effect is asymmetric as the effect of leaving democracy on protection is close to zero. The evidence supports the redistributive nature of democratic institutions toward the majority and, therefore, it is not inconsistent with the median voter model of political behaviour.

Suggested Citation

  • Olper, Alessandro & Falkowski, Jan & Swinnen, Johan F.M., 2009. "Democracy and Agricultural Protection: Parametric and Semi-parametric Matching Estimates," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49313, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea09:49313
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/49313
    Download Restriction: no

    References listed on IDEAS

    as
    1. Elias Papaioannou & Gregorios Siourounis, 2008. "Democratisation and Growth," Economic Journal, Royal Economic Society, vol. 118(532), pages 1520-1551, October.
    2. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
    3. Martin C. McGuire & Mancur Olson Jr., 1996. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 72-96, March.
    4. Swinnen, Johan F. M. & Banerjee, Anurag N. & Gorter, Harry de, 2001. "Economic development, institutional change, and the political economy of agricultural protection: An econometric study of Belgium since the 19th century," Agricultural Economics, Blackwell, vol. 26(1), pages 25-43, October.
    5. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    6. De Gorter, Harry & Swinnen, Johan, 2002. "Political economy of agricultural policy," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 36, pages 1893-1943 Elsevier.
    7. Romain Wacziarg & Karen Horn Welch, 2008. "Trade Liberalization and Growth: New Evidence," World Bank Economic Review, World Bank Group, vol. 22(2), pages 187-231, June.
    8. Acemoglu, Daron, 2005. "Politics and economics in weak and strong states," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1199-1226, October.
    9. Olper, Alessandro, 2007. "Land inequality, government ideology and agricultural protection," Food Policy, Elsevier, vol. 32(1), pages 67-83, February.
    10. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," American Economic Review, American Economic Association, vol. 96(2), pages 319-324, May.
    11. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    12. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
    13. repec:tpr:qjecon:v:109:y:1994:i:2:p:465-90 is not listed on IDEAS
    14. Giavazzi, Francesco & Tabellini, Guido, 2005. "Economic and political liberalizations," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1297-1330, October.
    15. Francisco Rodriguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters,in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338 National Bureau of Economic Research, Inc.
    16. Anderson, Kym, 1995. "Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 43(2), pages 401-423, January.
    17. Lindert Peter H., 1994. "The Rise of Social Spending, 1880-1930," Explorations in Economic History, Elsevier, vol. 31(1), pages 1-37, January.
    18. Casey B. Mulligan & Ricard Gil & Xavier Sala-i-Martin, 2004. "Do Democracies Have Different Public Policies than Nondemocracies?," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 51-74, Winter.
    19. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 1-19.
    20. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications, The World Bank, number 2611.
    21. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, June.
    22. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    23. Daron Acemoglu & James A. Robinson, 2008. "Persistence of Power, Elites, and Institutions," American Economic Review, American Economic Association, vol. 98(1), pages 267-293, March.
    24. Bates, Robert H., 1983. "Patterns of market intervention in agrarian Africa," Food Policy, Elsevier, vol. 8(4), pages 297-304, November.
    25. Beghin, John C & Kherallah, Mylene, 1994. "Political Institutions and International Patterns of Agricultural Protection," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 482-489, August.
    26. Timothy Besley & Masayuki Kudamatsu, 2006. "Health and Democracy," American Economic Review, American Economic Association, vol. 96(2), pages 313-318, May.
    27. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    28. Kym Anderson & William A. Masters, 2009. "Distortions to Agricultural Incentives in Africa," World Bank Publications, The World Bank, number 2607.
    29. Dabalen, Andrew & Paternostro, Stefano & Pierre, Gaelle, 2004. "The returns to participation in the non-farm sector in rural Rwanda," Policy Research Working Paper Series 3462, The World Bank.
    30. 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.
    31. Barbara Sianesi, 2001. "Propensity score matching," United Kingdom Stata Users' Group Meetings 2001 12, Stata Users Group, revised 23 Aug 2001.
    32. Henning, Christian H.C.A., 2008. "Determinants of Agricultural Protection in an International Perspective: The Role of Political Institutions," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43872, European Association of Agricultural Economists.
    33. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
    34. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422.
    35. Key, Nigel D. & Roberts, Robert J., 2008. "Do Decoupled Payments Stimulate Production? Estimating the Effect on Program Crop Acreage Using Matching," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6072, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    36. Torsten Persson, 2005. "Forms of Democracy, Policy and Economic Development," NBER Working Papers 11171, National Bureau of Economic Research, Inc.
    37. repec:cup:apsrev:v:87:y:1993:i:03:p:567-576_10 is not listed on IDEAS
    38. Charles A. Towe & Mitchell J. Morehart, 2009. "Credit Constraints: Their Existence, Determinants, and Implications for U.S. Farm and Nonfarm Sole Proprietorships," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 275-289.
    39. Olper, Alessandro & Raimondi, Valentina, 2008. "Consitutional Rules and Agricultural Policy Outcomes," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43870, European Association of Agricultural Economists.
    40. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    41. Daron Acemoglu & James A. Robinson, 2000. "Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1167-1199.
    42. de Haan, Jakob & Sturm, Jan-Egbert, 2003. "Does more democracy lead to greater economic freedom? New evidence for developing countries," European Journal of Political Economy, Elsevier, vol. 19(3), pages 547-563, September.
    43. Valenzuela, Ernesto & Wong, Sara & Sandri, Damiano, 2007. "Distortions to Agricultural Incentives in Ecuador," Agricultural Distortions Working Paper 48394, World Bank.
    44. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    45. Alessandro Olper, 2001. "Determinants of Agricultural Protection: The Role of Democracy and Institutional Setting Alessandro Olper," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(2), pages 75-92.
    46. Henning, Christian H.C.A., 2008. "Determinants of agricultural protection from an international perspective: The role of political institutions," IFPRI discussion papers 805, International Food Policy Research Institute (IFPRI).
    47. Milner, Helen V. & Kubota, Keiko, 2005. "Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries," International Organization, Cambridge University Press, vol. 59(01), pages 107-143, January.
    48. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2001. "Evaluating the employment impact of a mandatory job search assistance program," IFS Working Papers W01/20, Institute for Fiscal Studies.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Democratic Reforms; Agricultural Distortions; Comparative Political Economics; Agricultural and Food Policy; Political Economy; D72; F13; O13; P16; Q18;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea09:49313. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/aaeaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.