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Rent Seeking and the Common Agricultural Policy: Do member countries free ride on lobbying?

  • Furtan, William Hartley
  • Jensen, Maria Skovager
  • Sauer, Johannes

The Common Agricultural Policy is modelled as a club good providing the European Union (EU) farmer with financial benefits. We build an economic model which explains how much farmers in individual EU countries invest in rent-seeking activities in order to test for free-riding behaviour on lobbying costs. For our investigation we group the EU member countries by farm structure, and the type of benefit received. We explain the fees paid by farmers for lobbying by other countries fees, political variables, and country and regional agricultural characteristics. The model shows that some member countries free ride on others. This suggests a form of policy path dependency and leads to a suboptimal investment on lobbying of 7.5%.

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File URL: http://purl.umn.edu/6600
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Paper provided by European Association of Agricultural Economists in its series 107th Seminar, January 30-February 1, 2008, Sevilla, Spain with number 6600.

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Date of creation: 2008
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Handle: RePEc:ags:eaa107:6600
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  13. Horowitz, Joel L., 2001. "The Bootstrap," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 52, pages 3159-3228 Elsevier.
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