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Productive and Predatory Public Policies: Research Expenditures and Producer Subsidies in Agriculture

Author

Listed:
  • Gorter, Harry de
  • Nielson, David J.
  • Rausser, Gordon C.

Abstract

Governments are postulated to maximize a political preference function in choosing two policy instruments: research expenditures (a productive policy) that improve social welfare and production subsidies (a predatory policy) that incur deadweight losses. Each policy affects the distribution of income between producers and consumers. Governments determine the optimal mix of policies, taking into account interaction effects between research and subsidy expenditures. In addition to providing an explanation for underinvestment in research, the paper determines conditions under which research and subsidy policies are complementary. Such conditions are shown to characterize U.S. agriculture. Underinvestment in research is therefore less severe than in some other countries.
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Suggested Citation

  • Gorter, Harry de & Nielson, David J. & Rausser, Gordon C., 1990. "Productive and Predatory Public Policies: Research Expenditures and Producer Subsidies in Agriculture," Working Papers 179206, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudawp:179206
    DOI: 10.22004/ag.econ.179206
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    Citations

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    Cited by:

    1. Johan F.M. Swinnen & Harry de Gorter, 1998. "Endogenous Commodity Policies and the Social Benefits from Public Research Expenditures," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 107-115.
    2. Jeff Alwang & Jaime Ortiz & George Norton, 1995. "Interacciones entre Políticas de Precios y Gastos en Investigación Agropecuaria," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 32(96), pages 199-216.
    3. Apedaile, Leonard Peter & Barnard, Charles H. & Bollman, Ray D. & Calkins, Blaine, 1995. "Positioning for Trade Liberalization: Structure of Earnings, Comparative and Competitive Advantage of Agricultural Households in the United States and Canada," Project Report Series 24066, University of Alberta, Department of Resource Economics and Environmental Sociology.
    4. Pray, Carl E., 1996. "The impact of privatizing agricultural research in Great Britain: an interim report on PBI and ADAS," Food Policy, Elsevier, vol. 21(3), pages 305-318, July.
    5. Barrett, Christopher B., 1999. "The microeconomics of the developmental paradox: on the political economy of food price policy," Agricultural Economics, Blackwell, vol. 20(2), pages 159-172, March.
    6. Gordon C. Rausser & Harry de Gorter, 2013. "US Policy Contributions to Agricultural Commodity Price Fluctuations, 2006-12," WIDER Working Paper Series wp-2013-033, World Institute for Development Economic Research (UNU-WIDER).
    7. David Ubilava, 2012. "Modeling Nonlinearities in the U.S. Soybean‐to‐Corn Price Ratio: A Smooth Transition Autoregression Approach," Agribusiness, John Wiley & Sons, Ltd., vol. 28(1), pages 29-41, January.
    8. Kym Anderson, 2016. "Agricultural Trade, Policy Reforms, and Global Food Security," Palgrave Studies in Agricultural Economics and Food Policy, Palgrave Macmillan, number 978-1-137-46925-0, October.
    9. Gordon C. Rausser, 1992. "Predatory versus Productive Government: The Case of U.S. Agricultural Policies," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 133-157, Summer.
    10. Alston, Julian M. & Chalfant, James A. & Pardey, Philip G., 1993. "Structural Adjustment In Oecd Agriculture: Government Policies And Technical Change," Working Papers 14473, University of Minnesota, Center for International Food and Agricultural Policy.
    11. repec:lic:licosd:27911 is not listed on IDEAS
    12. Fertő, Imre, 1998. "Az agrárpolitika politikai gazdaságtana III. Vegyes motívumok az agrárpolitikában: termelő és ragadozó politikák [The political economy of agrarian policy. Part III. Mixed motives in agrarian polic," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 424-436.
    13. D.S. Bullock & K. Salhofer, 1998. "Measuring the social costs of suboptimal combinations of policy instruments: A general framework and an example," Agricultural Economics, International Association of Agricultural Economists, vol. 18(3), pages 249-259, May.
    14. Swinnen, Johan F.M., 1997. "The Political Economy of Agricultural Transition," 1997: Economic Transition in Central and East Europe, and the Former Soviet Union: Implications ... Symposium, June 12-14, 1997, Berlin, Germany 50836, International Agricultural Trade Research Consortium.
    15. Tomislav Herceg & Iva Vuksanovic, 2017. "Technological progress in Croatian perennial agriculture," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 6(1), pages 18-32, May.
    16. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    17. Gardner, Bruce L., 1992. "Price Supports and Optimal Spending on Agricultural Research," Working Papers 197793, University of Maryland, Department of Agricultural and Resource Economics.
    18. Bullock, David S. & Salhofer, Klaus, 1998. "A Note On The Efficiency Of Income Redistribution With Simple And Combined Policies," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(2), pages 1-4, October.
    19. Will Martin & Julian M. Alston, 1997. "Producer Surplus without Apology? Evaluating Investments in RD," The Economic Record, The Economic Society of Australia, vol. 73(221), pages 146-158, June.

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