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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.

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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 724.

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Date of creation: 01 Jan 1992
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Handle: RePEc:isu:genres:724
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Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070

Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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  1. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
  2. 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.
  3. Becker, Gary S., 1985. "Public policies, pressure groups, and dead weight costs," Journal of Public Economics, Elsevier, vol. 28(3), pages 329-347, December.
  4. Hochman, Eithan & Zilberman, David, 1978. "Examination of Environmental Policies Using Production and Pollution Microparameter Distributions," Econometrica, Econometric Society, vol. 46(4), pages 739-60, July.
  5. 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.
  6. 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.
  7. Foster, William E. & Rausser, Gordon C., 1990. "Price-distorting compensation serving the public interest," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9z03s3x1, Department of Agricultural & Resource Economics, UC Berkeley.
  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. 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.
  10. Rausser, Gordon C. & de Gorter, Harry, 1988. "Endogenizing policy in models of agricultural markets," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt18z7n1qz, Department of Agricultural & Resource Economics, UC Berkeley.
  11. Rausser, Gordon C. & Chalfant, James A. & Love, H. Alan & Stamoulis, Kostas G., 1986. "Macroeconomic linkages, taxes, and subsidies in the U.S. agricultural sector," CUDARE Working Paper Series 393, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  12. Rausser, Gordon C. & Lapan, Harvey E, 1980. "Natural resources, goods, bads and alternative institutional frameworks," CUDARE Working Paper Series 89, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  13. Love, H. Alan & Foster, William E., 1990. "Commodity Program Slippage Rates For Corn And Wheat," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(02), December.
  14. 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.
  15. Zusman, Pinhas, 1976. "The Incorporation and Measurement of Social Power in Economic Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 17(2), pages 447-62, June.
  16. Rausser, Gordon C, 1974. "Technological Change, Production, and Investment in Natural Resource Industries," American Economic Review, American Economic Association, vol. 64(6), pages 1049-59, December.
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