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The Countercyclicity of Government Transfers: A Political Pressure Group Approach

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  • David S. Bullock

Abstract

Farmers receive greater subsidies from the government during times of relatively unfavorable market conditions. A generalization of Becker's (1983) model is presented that offers an explanation of how political pressure groups respond to market forces. In the model, pressure groups compete for government transfers, but market conditions affect political agents' political expenditures. Political agents can be altruistic, taxpaying interest groups can perceive benefits (not just costs) of transfer programs, and subsidy-receiving interest groups can perceive costs (not just benefits) of transfer programs. The model offers a formal explanation of transfer countercyclical within the general framework of models of competition among political pressure groups.

Suggested Citation

  • David S. Bullock, 1994. "The Countercyclicity of Government Transfers: A Political Pressure Group Approach," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 16(1), pages 93-102.
  • Handle: RePEc:oup:revage:v:16:y:1994:i:1:p:93-102.
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    File URL: http://hdl.handle.net/10.2307/1349524
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    Cited by:

    1. Garrett, Thomas A. & Marsh, Thomas L. & Marshall, Maria I., 2006. "Political allocation of US agriculture disaster payments in the 1990s," International Review of Law and Economics, Elsevier, vol. 26(2), pages 143-161, June.
    2. Bullock, David S. & Mittenzwei, Klaus, 2005. "Using Evolutionary Game Theory to Examine U.S. and EU Agricultural Policy Institutions," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24538, European Association of Agricultural Economists.

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