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Price-Distorting Compensation Serving the Consumer and Taxpayer Interest

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  • William E. Foster
  • Gordon C. Rausser

Abstract

In this paper we address a bothersome question for public choice analysis: Why do consumers and taxpayers acquiesce to seemingly inefficient wealth transfers to a relatively small number of producers? The most common and briefest answer given by political economists is that any individual consumer/taxpayer suffers too little in the rent-seeking game to bear the cost of opposing the aggressive political influence of producers who enjoy the concentrated benefits. In this paper we examine an alternative answer lying in the potential benefits that accrue to consumers and taxpayers from price distorting wealth transfers to heterogeneous producers.

Suggested Citation

  • William E. Foster & Gordon C. Rausser, 1992. "Price-Distorting Compensation Serving the Consumer and Taxpayer Interest," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 90-gatt15, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:fpaper:90-gatt15
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    Cited by:

    1. de Gorter, Harry, 2008. "Explaining Inefficient Policy Instruments," Agricultural Distortions Working Paper Series 48638, World Bank.
    2. 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).
    3. de Gorter, Harry & Rausser, Gordon C., 2013. "US Policy Contributions to Agricultural Commodity Price Fluctuations, 2006-12," WIDER Working Paper Series 033, World Institute for Development Economic Research (UNU-WIDER).
    4. repec:lic:licosd:27911 is not listed on IDEAS
    5. Swinnen, Johan F. M. & Gorter, Harry de & Rausser, Gordon C. & Banerjee, Anurag N., 2000. "The political economy of public research investment and commodity policies in agriculture: an empirical study," Agricultural Economics, Blackwell, vol. 22(2), pages 111-122, March.
    6. 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.
    7. Virender Gautam & Sudhir Chaudhary & Darnell B. Smith, 1997. "Consumer and Producer Influences in Agricultural Policy Formulation: Some Empirical Evidence," Center for Agricultural and Rural Development (CARD) Publications 97-wp175, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    8. de Gorter, Harry & Swinnen, Johan F.M., 1996. "The Impact Of Economic Development On Redistributive And Public Research Policies In Agriculture," Working Papers 127931, Cornell University, Department of Applied Economics and Management.
    9. Virender Gautam & Sudhir Chaudhary & Darnell B. Smith, 1997. "Consumer and Producer Influences in Agricultural Policy Formulation: Some Empirical Evidence," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 97-wp175, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    10. Weinberg, Joe, 2018. "Where’s the Pork?: The Political Economy of the US Farm Bill," 2018 Annual Meeting, August 5-7, Washington, D.C. 273867, Agricultural and Applied Economics Association.

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