The political economy of agricultural and food policies

Abstract

Food and agriculture have been subject to heavy-handed government interventions throughout much of history and across the globe, both in developing and developed countries.1 Political considerations are crucial to understand these policies since almost all agricultural and food policies have redistributive effects and are therefore subject to lobbying and pressure from interest groups and used by decision-makers to influence society for both economic and political reasons. Some policies, such as import tariffs or export taxes, have clear distributional objectives and reduce total welfare by introducing distortions in the economy. Other policies, such as food standards, land reforms, or public investments in agricultural research, may increase total welfare but at the same time also have distributional effects. These distributional effects will influence the preferences of different interest groups and thus trigger political action. The inherent interlinkage between efficiency and equity issues in policymaking meant that for much of history, economics and politics were closely related disciplines, often written about by the same authors, as reflected in the works of the original architects of the economics discipline—Adam Smith, John Stuart Mill, David Ricardo, and so on. In the late 19th century the economics discipline started separating itself from the “political economy” framework. The revival (or return) of political economy started in the 1950s and 1960s and was referred to as “neoclassical political economy” or “new political economy,” as economists started using their economic tools to analyze how incentives of political agents and constraints of political institutions influenced political decision-making. The start of this field is often associated with