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Impact of Economic Development on Commodity and Public Research Policies in Agriculture
Author(s) -
De Gorter Harry,
Swinnen Johan F.M.
Publication year - 1998
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/1467-9361.00027
Subject(s) - economics , subsidy , commodity , endowment , agriculture , politics , investment (military) , public economics , market economy , ecology , philosophy , epistemology , political science , law , biology
A political‐economic explanation is provided for the existence of commodity policy and research expenditures in agriculture. Structural economic characteristics such as pre‐policy endowment incomes, deadweight costs, and distributional impact of research are found to determine the levels of commodity price subsidies (taxes in developing countries) and underinvestment in research in all countries. Unequal benefits from research generate two types of interaction effects: political interaction effects , whereby commodity policy reduces research‐induced inequality, resulting in more research; and economic interaction effects , whereby deadweight costs per unit transfer decline with research. The latter effect generates increased levels of political optimal research investment.