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Predatory versus productive government: the case of U.S. agricultural policies


  • Rausser, Gordon C.


This essay will argue that agricultural policy in the United States has led to both the enhancement of efficiency through "productive policies" and the transfer of wealth and income to special interests through redistributive or "predatory policies." These two activities can be labeled as PESTs and PERTs. PEST policies, or political-economic-seeking transfers, are meant to redistribute wealth from one social group to another and are not explicitly concerned with efficiency. In contrast, PERTs, or political-economic resource transactions, are intended to correct market failures or to provide public goods; these policies have neutral distributional effects, at least in design. A review of the history of public policy in agriculture reveals not only tension between the PERT and PEST roles of the public sector, but also some coordination between these two types of activities. As different interest groups pressure the political process, the government trades off PESTs and PERTs in its attempts to acquire, balance, and secure political power. At times this has led to combinations of programs that appear incoherent. In such a world, the challenge for economists is to design and advocate policies that are both economically productive and politically sustainable.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

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  • Rausser, Gordon C., 1991. "Predatory versus productive government: the case of U.S. agricultural policies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt21913950, Department of Agricultural & Resource Economics, UC Berkeley.
  • Handle: RePEc:cdl:agrebk:qt21913950

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    References listed on IDEAS

    1. William E. Foster & Gordon C. Rausser, 1991. "Farmer Behavior under Risk of Failure," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 276-288.
    2. 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.
    3. Gordon C. Rausser & James A. Chalfant & H. Alan Love & Kostas G. Stamoulis, 1986. "Macroeconomic Linkages, Taxes, and Subsidies in the U.S. Agricultural Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(2), pages 399-412.
    4. Becker, Gary S., 1985. "Public policies, pressure groups, and dead weight costs," Journal of Public Economics, Elsevier, vol. 28(3), pages 329-347, December.
    5. Gordon C. Rausser & Pinhas Zusman, 1992. "Public Policy and Constitutional Prescription," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 247-257.
    6. Rausser, Gordon C, 1974. "Technological Change, Production, and Investment in Natural Resource Industries," American Economic Review, American Economic Association, vol. 64(6), pages 1049-1059, December.
    7. Rausser, Gordon C. & Lapan, Harvey E., 1979. "Natural resources, goods, bads and alternative institutional frameworks," Resources and Energy, Elsevier, vol. 2(4), pages 293-324, December.
    8. Gordon C. Rausser, 1982. "Political Economic Markets: PERTs and PESTs in Food and Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(5), pages 821-833.
    9. 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.
    10. Gordon Rausser & Richard Howitt, 1975. "Microeconomics: Stochastic Control of Environmental Externalities," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 4, number 2, pages 271-292 National Bureau of Economic Research, Inc.
    11. Hochman, Eithan & Zilberman, David, 1978. "Examination of Environmental Policies Using Production and Pollution Microparameter Distributions," Econometrica, Econometric Society, vol. 46(4), pages 739-760, July.
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    Cited by:

    1. Jacques Le Cacheux & Henri Mendras, 1992. "Éléments pour une nouvelle politique agricole," Revue de l'OFCE, Programme National Persée, vol. 42(1), pages 95-134.
    2. de Gorter, Harry & Nielson, David J. & Rausser, Gordon C., 1990. "The political economy of productive and predatory policies: a case study from agriculture," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0q9495xv, Department of Agricultural & Resource Economics, UC Berkeley.
    3. De Gorter, Harry & Swinnen, Jo, 1995. "The Political Economy and Institutional Determinants of Public Policy in Agriculture," 1994 Conference, August 22-29, 1994, Harare, Zimbabwe 183390, International Association of Agricultural Economists.
    4. 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.
    5. Apedaile, Leonard Peter & Barnard, Charles H. & Bollman, Ray D. & Calkins, Blaine, 1995. "Positioning for Trade Liberalization: Structure of Earnings, Comparative and Competitive Advantage of Agricultural Households in the United States and Canada," Project Report Series 24066, University of Alberta, Department of Resource Economics and Environmental Sociology.
    6. Ahearn, Mary Clare & Yee, Jet & Huffman, Wallace E., 2002. "The Impact Of Government Policies On Agricultural Productivity And Structure: Preliminary Results," 2002 Annual meeting, July 28-31, Long Beach, CA 19865, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Ray, Daryll E., 2001. "Impacts Of The 1996 Farm Bill Including Ad Hoc Additions," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 33(02), August.
    8. Stephen Morris & Stephen Coate, 1999. "Policy Persistence," American Economic Review, American Economic Association, vol. 89(5), pages 1327-1336, December.
    9. de Gorter, Harry & Rausser, Gordon C., 2013. "US Policy Contributions to Agricultural Commodity Price Fluctuations, 2006-12," WIDER Working Paper Series 033, World Institute for Development Economic Research (UNU-WIDER).
    10. Lee S. Friedman, 1999. "Presidential address: Peanuts envy?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(2), pages 211-225.
    11. Nuppenau, Ernst-August, 2000. "Public Preferences, Statutory Regulations and Bargaining in Field Margin Provision for Ecological Main Structures," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 1(1), January.
    12. Rausser, Gordon C. & Foster, William E., 1990. "Public goods and wealth transfer tradeoffs," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7f97x962, Department of Agricultural & Resource Economics, UC Berkeley.
    13. Rausser, Gordon C. & Roland, Gerard, 2009. "Special Interests versus the Public Interest in Policy Determination," Agricultural Distortions Working Paper 50294, World Bank.
    14. Johan F.M.Swinnen & Alessandro Olper & Thijs Vandemoortele, 2011. "The Political Economy of Policy Instrument Choice: Theory and Evidence from Agricultural Policies," LICOS Discussion Papers 27911, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    15. 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 of Agricultural Economists, International Association of Agricultural Economists, vol. 22(2), March.
    16. Fertő, Imre, 1998. "Az agrárpolitika politikai gazdaságtana III. Vegyes motívumok az agrárpolitikában: termelő és ragadozó politikák
      [The political economy of agrarian policy. Part III. Mixed motives in agrarian polic
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 424-436.
    17. El-Osta, Hisham S. & Mishra, Ashok K., 2005. "Dimensions of Wealth Dispersion Among Farm Operator Households: An Assessment of the Impact of Farm Subsidies," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 37(01), pages 187-208, April.
    18. Moon, Wanki, 2011. "Is agriculture compatible with free trade?," Ecological Economics, Elsevier, vol. 71(C), pages 13-24.
    19. Swinnen, Johan F.M., 1997. "The Political Economy of Agricultural Transition," 1997: Economic Transition in Central and East Europe, and the Former Soviet Union: Implications ... Symposium, June 12-14, 1997, Berlin, Germany 50836, International Agricultural Trade Research Consortium.
    20. Pinstrup-Andersen, Per (ed.), 2016. "Food Price Policy in an Era of Market Instability: A Political Economy Analysis," OUP Catalogue, Oxford University Press, number 9780198788836, June.
    21. Guy Holburn & Richard Bergh, 2006. "Consumer capture of regulatory institutions: The creation of public utility consumer advocates in the United States," Public Choice, Springer, vol. 126(1), pages 45-73, January.
    22. Fertő, Imre, 1996. "A mezőgazdaság a piacgazdaságban
      [Agriculture in a market economy]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 114-127.
    23. 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.
    24. Leathers, Howard D., 2007. "Orderly Marketing in Agriculture Revisited," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 36(2), October.
    25. Freshwater, David, 2007. "The Economic Well-Being of Farmers As An On-going National Public Policy Issue," Staff Papers 42313, University of Kentucky, Department of Agricultural Economics.

    More about this item


    the case of U.S. agricultural policies; Social and Behavioral Sciences;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior


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