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Productive and Predatory Public Policies: Research Expenditures and Producer Subsidies in Agriculture


  • Gorter, Harry de
  • Nielson, David J.
  • Rausser, Gordon C.


Governments are postulated to maximize a political preference function in choosing two policy instruments: research expenditures (a productive policy) that improve social welfare and production subsidies (a predatory policy) that incur deadweight losses. Each policy affects the distribution of income between producers and consumers. Governments determine the optimal mix of policies, taking into account interaction effects between research and subsidy expenditures. In addition to providing an explanation for underinvestment in research, the paper determines conditions under which research and subsidy policies are complementary. Such conditions are shown to characterize U.S. agriculture. Underinvestment in research is therefore less severe than in some other countries.
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Suggested Citation

  • Gorter, Harry de & Nielson, David J. & Rausser, Gordon C., 1990. "Productive and Predatory Public Policies: Research Expenditures and Producer Subsidies in Agriculture," Working Papers 179206, Cornell University, Department of Applied Economics and Management.
  • Handle: RePEc:ags:cudawp:179206

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    Cited by:

    1. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    2. repec:sek:jijoes:v:6:y:2017:i:1:p:18-32 is not listed on IDEAS
    3. Barrett, Christopher B., 1999. "The microeconomics of the developmental paradox: on the political economy of food price policy," Agricultural Economics, Blackwell, vol. 20(2), pages 159-172, March.


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