Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries

Anderson, Kym

doi:10.1086/452156

Cited by 211 publications

(85 citation statements)

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“…And we therefore expect governments in countries with large agricultural sectors to adopt relatively adverse policies toward farming (Olson 1965, Bates 1981, Anderson 1995.…”

Section: Lobbyingmentioning

confidence: 99%

Political Economy of Agricultural Trade Interventions in Africa

Bates¹,

Block²

2009

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This paper uses new data on agricultural policy interventions to examine the political economy of agricultural trade policies in Sub-Saharan Africa. Historically, African governments have discriminated against agricultural producers in general (relative to producers in non-agricultural sectors), and against producers of export agriculture in particular. While more moderate in recent years, these patterns of discrimination persist. They do so even though farmers comprise a political majority. Rather than claiming the existence of a single best approach to the analysis of policy choice, we explore the impact of three factors: institutions, regional inequality, and tax revenuegeneration. We find that agricultural taxation increases with the rural population share in the absence of electoral party competition; yet, the existence of party competition turns the lobbying disadvantage of the rural majority into political advantage. We also find that privileged cash crop regions are particular targets for redistributive taxation, unless the country's president comes from that region. In addition, governments of resource-rich countries, while continuing to tax export producers, reduce their taxation of food consumers. 1 When greater than zero, the indicators suggest that government policies favor farming; when the relative rate of assistance is below zero, it suggests policies have an anti-agricultural bias.As indicated in chapter 2, governments in Africa, like those elsewhere, have adopted less distorting/more neutral policies since the 1980s. Increasingly their policies impact farming and other industries in a less biased manner. However, policies in Africa continue to alter prices in ways that discriminate against farming, and more so than in other developing country regions.In this chapter we describe the levels of protection in our sample of 20 Sub-SaharanAfrican countries 2 and the manner in which they vary; and, drawing from the literature on the political economy of agriculture, we advance and test a series of explanations for the patterns we observe. , and Zimbabwe (L). These countries account for no less than 90 percent of Sub-Saharan Africa's population, GDP, farm households and agricultural output. "C" indicates coastal; "L" indicates landlocked, and "R" indicates resource-rich. Note that for five of these countries (Benin, Burkina Faso, Chad, Mali, and Togo) the data refer only to cotton. We include these countries only in our analyses of agricultural exportables and tradables. The data in figure 2 suggest that Africa's governments (with the exception of those in landlocked countries) have tended to protect food crops, raising the level of domestic prices above those prevailing in world markets, while taxing cash crops. The distortions introduced by government policies have eroded over time, with nominal rates of assistance for cash crops converging toward zero. Within the region, governments of resource rich countries tend to provide the most favorable policy environment for producers of both food a...

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“…And we therefore expect governments in countries with large agricultural sectors to adopt relatively adverse policies toward farming (Olson 1965, Bates 1981, Anderson 1995.…”

Section: Lobbyingmentioning

confidence: 99%

Political Economy of Agricultural Trade Interventions in Africa

Bates¹,

Block²

2009

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“…1 The classic interpretation for this pattern is that, on moving from developing to industrialised countries, the farm groups, compared to the consumer and taxpayer groups, become more effective in collective action, as a consequence of the smaller farm numbers and the lower communication and transportation costs inherent in industrial development, all factors that reduce organizational costs and free rider problems for collective action (Olson, 1965). Moreover, since the per capita cost on the rest of society falls with less farmers, the opposition of taxpayers and consumers to (agricultural) subsidies decreases as the number of farmers decreases with economic development (Becker, 1983;Swinnen, 1994;Anderson 1995).…”

Section: Testable Hypotheses For Agricultural Policymentioning

confidence: 99%

“…Specifically, we start by a parsimonious specification where, as structural control, we include only the level of development, gdppc, measured by the real per capita GDP taken from the World Bank, World Development Indicators, and the share of agricultural employment, emps, based on Food and Agriculture Organization (FAO) data. The inclusion of the level of development allows us to control for the so-called 'development paradox' -namely the strong positive correlation between agricultural protection and per capita GDP -that represents one of the most important stylized fact of agricultural protection patterns (see Swinnen, 1994;Anderson, 1995). On the other hand, the inclusion of the agricultural employment share acts as a control for the well known idea that small groups normally receive more protection and support.…”

Section: Other Variablesmentioning

confidence: 99%

Mass Media and Public Policy: Global Evidence from Agricultural Policies

Olper

Swinnen

2009

SSRN Journal

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Mass media plays a crucial role in information distribution and thus in the political market and public policy making. Theory predicts that information provided by mass media reflects the media's incentives to provide news to different types of groups in society, and affects these groups' influence in policy-making. We use data on agricultural policy from 60 countries, spanning a wide range of development stages and media markets, to test these predictions. We find that, in line with theoretical predictions, public support to agriculture is strongly affected by the structure of the mass media. In particular, a greater role of the private mass media in society is associated with policies which benefit the majority more: it reduces taxation of agriculture in poor countries and reduces subsidization of agriculture in rich countries, ceteris paribus. The evidence is also consistent with the hypothesis that increased competition in commercial media reduces transfers to special interest groups and contributes to more efficient public policies.JEL classification: D72, D83, Q18

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“…A more convincing explanation for the net taxation of agriculture relative to the industrial sector in poor countries and the opposite bias in rich countries has to do with the differing distributional effects of those interventions and of the relative costs of lobbying the government by the key interest groups (Anderson 1995). Because farmers are mainly subsisting in poor agrarian economies, their real incomes are not greatly affected by increases in farm output prices -whereas the urban population is far smaller and more easily able to organize, and food is an important part of consumer budgets.…”

Section: Policy Developments To the Mid-1980smentioning

confidence: 99%

Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries

Cited by 211 publications

References 0 publications

Political Economy of Agricultural Trade Interventions in Africa

Political Economy of Agricultural Trade Interventions in Africa

Mass Media and Public Policy: Global Evidence from Agricultural Policies

Reducing Distortions To Agricultural Incentives : Progress, Pitfalls, And Prospects

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