Political Economy of Distortions to Agricultural Incentives : Introduction and Summary
During the 1960s and 1970s most developing countries imposed anti-agricultural policies, while many high-income countries restricted agricultural imports and subsidized their farmers. Both sets of policies inhibited economic growth and poverty alle...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/267471468346438258/Political-economy-of-distortions-to-agricultural-incentives-introduction-and-summary http://hdl.handle.net/10986/28164 |
| Summary: | During the 1960s and 1970s most
developing countries imposed anti-agricultural policies,
while many high-income countries restricted agricultural
imports and subsidized their farmers. Both sets of policies
inhibited economic growth and poverty alleviation in
developing countries, while doing little to assist small
farmers in high-income countries. Since the 1980s, however,
many developing countries began to reduce the
anti-agricultural bias of sectoral policies, and from the
early 1990s the European Union began to move away from price
supports to more-direct forms of farm income payments. This
paper summarizes a forthcoming book that seeks to explain
this evolving pattern of distortions to incentives
conceptually and econometrically by making use of new
political economy theory and a new globally comprehensive
and consistent set of estimates of the changing extent of
annual distortions over the past half-century. The
distortion estimates involve more than 70 products that
cover around 70 percent of the value of agricultural output
in each of 75 countries that together account for over 90
percent of the global economy, and they expose the
contribution of the various policy instruments (both farm
and non-farm) to the net distortion to farmer incentives.
Such a widespread coverage of countries, products, years and
policy instruments has allowed this collection of studies to
test a wide range of hypotheses suggested by the new
political economy literature, including the importance of
institutions. As a set it sheds much new light on the
underlying forces that have affected incentives facing
farmers in the course of national and global economic and
political development, and hence on how those distortions
might change in the future - or be changed by concerted
actions to offset political pressures from traditionally
powerful vested interests. |
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