Determinants of Agricultural Protection in an International Perspective: The Role of Political Institutions
Abstract—This paper studies the role of political institutions in determining the political success of agriculture in avoiding taxation or attracting government transfers in developing and industrialized countries, respectively. The model is based on a probabilistic voting environment, where in industrialized countries rural districts are less ideologically committed than urban districts, while in developing countries urban districts are less ideologically committed than rural districts. As a consequence, in industrialized (developing) countries rural (urban) districts are pivotal in determining the coalition that obtains a majority, whereas urban (rural) districts are pivotal within the majority itself. In bargaining at the legislature, this generates a conflict between the government, who will tend to favor rural (urban) districts, and its parliamentary majority, that will be dominated by urban (rural) concerns. As district size grows and the electoral system converges to a pure proportional system, both of these biases are attenuated. Overall, an opposite nonlinear relationship between district size and agricultural subsidies on the one hand and district size and taxation on the other hand follows, i.e. in developing countries taxation of agriculture first increases and then decreases with district magnitude, while in industrialized countries agricultural subsidization first increases and then decreases with district magnitude. Moreover, the impact of district magnitude on the level of agricultural subsidization is attenuated in presidential when compared to parliamentary systems, while the level of agricultural taxation is amplified in presidential systems. Empirical results from cross-country analysis including 37 countries over 20 years mainly support our theory.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Beghin, John C. & Fafchamps, M., 1995.
"Constitution, Institutions, and the Political Economy of Farm Policies. What Empirical Content?,"
Staff General Research Papers
1620, Iowa State University, Department of Economics.
- Beghin, John C. & Fafchamps, Marcel, 1995. "Constitutions, Institutions and the Political Economy of Farm Policies: What Empirical Content?," 1994 Conference, August 22-29, 1994, Harare, Zimbabwe 183391, International Association of Agricultural Economists.
- Hans P. Binswanger & Klaus Deininger, 1997.
"Explaining Agricultural and Agrarian Policies in Developing Countries,"
Journal of Economic Literature,
American Economic Association, vol. 35(4), pages 1958-2005, December.
- Binswanger, Hans P. & Deininger, Klaus, 1997. "Explaining agricultural and agrarian policies in developing countries," Policy Research Working Paper Series 1765, The World Bank.
- Roberto Perotti & Massimo V. Rostagno & Gian-Maria Milesi-Ferretti, 2001.
"Electoral System and Public Spending,"
IMF Working Papers
01/22, International Monetary Fund.
- Persson, Torsten & Tabellini, Guido, 2002. "Do constitutions cause large governments? Quasi-experimental evidence," European Economic Review, Elsevier, vol. 46(4-5), pages 908-918, May.
- 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,"
Blackwell, vol. 26(1), pages 25-43, October.
- 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 of Agricultural Economists, International Association of Agricultural Economists, vol. 26(1), October.
- 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.
- John C. Beghin & William E. Foster & Mylene Kherallah, 1996.
"Institutions And Market Distortions: International Evidence For Tobacco,"
Journal of Agricultural Economics,
Wiley Blackwell, vol. 47(1-4), pages 355-365.
- Beghin, John C. & Foster, William E. & Kherallah, Mylene, 1996. "Institutions and Market Distortions: International Evidence for Tobacco," Staff General Research Papers 1569, Iowa State University, Department of Economics.
- Gary J. Miller, 1997. "The Impact of Economics on Contemporary Political Science," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1173-1204, September.
- Beghin, John C. & Kherallah, Mylene, 1994.
"Political Institutions and International Patterns of Agricultural Protection,"
Staff General Research Papers
1602, Iowa State University, Department of Economics.
- 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 482-89, August.
- Swinnen, Johan F.M., 1991. "A Positive Theory Of Agricultural Protection," Working Papers 6851, Cornell University, Department of Applied Economics and Management.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:ags:eaae08:43872. 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)
If references are entirely missing, you can add them using this form.