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EU Agri-environmental Programs and the "Restaurant Table Effect"

  • Thilo W. Glebe


    (Environmental Economics and Agricultural Policy Group, Technical University of Munich)

  • Klaus Salhofer


    (Environmental Economics and Agricultural Policy Group, Technical University of Munich)

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    The share of agricultural area enrolled in EU agri-environmental programs varies significantly between EU member states. These national differences are explained, based on a model that reflects both, that these programs internalize externalities and the political decision making process. We identify six factors which affect the extent to which agri-environmental programs are implemented: environmental benefits, opportunity costs of participation, budgetary pressure, the share of program expenditures financed by the EU, the political weight attributed to farmers at the national, and the political influence of each country at the EU level. In addition, we demonstrate that if the policy decision making process is non-cooperatively at the EU level, countries which contribute less to the EU budget will ceteris paribus implement more programs. Using data for four years and feasible Generalised Least Square methods we are able to confirm our theoretical results and a non-cooperative behavior of EU member states.

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    Paper provided by Technische Universität München, Environmental Economics and Agricultural Policy Group in its series Discussion Papers with number 042006.

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    Length: 17 pages
    Date of creation: Apr 2006
    Date of revision:
    Publication status: Published in Agricultural Economics (revised version; forthcoming)
    Handle: RePEc:tuu:papers:042006
    Contact details of provider: Postal: Alte Akademie 14, D-85350 München
    Phone: +49(0)8161 71-3406
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    1. Olson, Mancur, Jr, 1969. "The Principle of "Fiscal Equivalence": The Division of Responsibilities among Different Levels of Government," American Economic Review, American Economic Association, vol. 59(2), pages 479-87, May.
    2. Beghin, John C., 1990. "Game-Theoretic Model of Endogenous Public Policies, A," Staff General Research Papers 1573, Iowa State University, Department of Economics.
    3. Coughlin, Peter J & Mueller, Dennis C & Murrell, Peter, 1990. "Electoral Politics, Interest Groups, and the Size of Government," Economic Inquiry, Western Economic Association International, vol. 28(4), pages 682-705, October.
    4. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
    5. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
    6. Rudloff, Bettina, 2002. "Agrarumweltpolitik nach dem Subsidiaritätsprinzip - Föderalismustheoretische Grundlagen zur Politikgestaltung," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 51(5).
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