Weight Perception and Efficiency Loss in Bilateral Trading: The Case of US and EU Agricultural Policies

Abstract

This study determines the perceived weights of various producer groups by policy makers in selected sectors (wheat, corn, sugar, beef and veal, and milk), for both the US and the EU, from 1980 to 2000, in five-year intervals. Results show that the US’s weights deviate less than the EU’s, compared with the external protections, indicating that the lobbying efforts of interest groups in the US are reflected more closely in external policy design, and are therefore more efficient than those in the EU. Game simulation suggests that it is in the best interest of both blocs to choose the status quo action among various trade liberalization scenarios with the latest calculated weights. Copyright Springer Science+Business Media, Inc. 2005weight efficiency, lobbying, political preferences, bilateral agricultural trade,