Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries

Kym Anderson

No 789, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In seeking to explain why poor countries tend to choose policies that tax agriculture relative to manufacturing while rich countries do the opposite, archetypical parameters for a poor agrarian economy and a rich industrial one are inserted in a computable general equilibrium model to simulate the medium-term effects on income distribution of policies that distort the relative prices of tradables. The model includes a non-tradables sector and intermediate inputs, realistic features that ensure even greater skewness in the distributional effects of protection than simpler models suggest. The magnitude of the results helps explain the tendency for countries to change gradually from taxing to subsidizing agriculture relative to manufacturing as their economies develop. The paper draws out the implications of the analysis for agricultural and trade policy reform in the 1990s.

Keywords: Agricultural Protection; Industrial Protection; Lobbying; Political Economy (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 1993-06
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Citations: View citations in EconPapers (14)

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