price distortions in agriculture and their effects an international comparison the central thesis of this paper is that agricultural pricing policies pursued by developing countries produce effects which are diametrically opposite to those produced by the pricing policies of many developed countries and that the policies of both are costly in terms of global welfare in general the agricultural sector in developing countries is heavily taxed while that in the developed countries receives substantial price protection the effects of agricultural price distortions on output consumption trade and rural employment are estimated for nine countries in addition the effects of price distortions on the distribution of income between producers and consumers on government revenue and foreign exchange and the net social losses of the policies are calculated the results indicate that there are large income transfers and impacts on migration from the rural to the urban sector in developing countries and from the urban to the rural sector in developed economies

an algorithmic theory of the choice of techniques the author builds a theory of the choice of techniques in joint production at a given profit rate considering a market algorithm partial results are extended by means of an abstract notion of technology where techniques meet demand and satisfy local properties global results on the existence uniqueness and convergence towards an equilibrium technique are obtained the author thus characterizes cases where a square technique is reached which provides an answer to an old debate initiated by w s jevons between classical and neoclassical economists but the framework allows for a more general interpretation in terms of two level planning procedures copyright 1990 by the econometric society

the dominant technique in joint production systems there was very little discussion of sraffa s theory of joint production during the first ten years after the publication of production of commodities by means of commodities sraffa 1960 because attempts to understand his theory of single product systems and the critique of the dominant theory of capital absorbed all attention thereafter the theory of joint production came increasingly into focus one reason little understood at first was that for the first time sraffa s approach provided economists working in the classical tradition with the possibility of defining prices of production in the presence of multiple product industries when i wrote my mr sraffa on joint production in 1970 luigi pasinetti drew my attention to the famous passage in jevons 1871 1957 in which he invokes joint production to prove that a classical cost of production theory as he understood it could not explain the relative prices of by products a little later sraffa s solution to the explanation of relative prices was used by steedman to criticise marx s form of the labour theory of value steedman 1975

political economic markets perts and pests in food and agriculture j i lyniversity of california berkeley jjept of agricultural and resource economic l working paper al cljdare i lorking paper 0 231 politic eco lic l rxets a d pests i j food l ti achiculture by per ts cordon c rausser ja nlnl tt junot tlon a riii ent st ticn giannini fou 1cl itiol1of ar ricultllrnj econo ll i cs july 11 w

promotion of the agricultural sector and political power in austria in most industrialized countries farmers as a small and well orgnized group are ableto influence government decisions to get rent creating proposals enacted two different viewsare presented to explain why the chicagoan view efficient redistribution hypothesis and the virginian view inefficient outcome of political bargaining a vertically structuredempirical model of the austrian farm sector is employed to test both hypotheses quantitativeresults of the welfare transfers from consumers taxpayers to farmers and agribusiness firmsare derived and the political weights of these groups are presented

political economy of u s sugar policies this article examines political economic decision making with respect to u s sugar policies it evaluates the responsiveness of target prices and import quotas levels to changes in a the economic surpluses of market participants and b the federal budget deficit results indicate a weak linkage between sugar producer surplus and subsequent target prices levels but a strong linkage between the federal budget deficit and subsequent import quota levels the influences of sugar users corn sweetener producers and foreign countries are also examined

approximate surrogate production functions the cambridge debate showed that an aggregation of capital is not possible in general a recent investigation has found one example for reswitching and several for reverse capital deepening but the paradoxes appear to be infrequent the paper provides a theoretical justification of this result and shows how wage curves of input output matrices with small non dominant eigenvalues become quasi linear with some numeraires large random systems lead to the genesis of such states approximate surrogate production functions then seem possible a family of economic systems with constant capital composition allows construction of a surrogate production function copyright oxford university press

state and prospect of public choice a european view the victory of public choice may not yet have arrived and the share of european contributions may still be small it has nevertheless been argued that there is a great future in public choice three especially promising areas have been indicated by way of example the theory of economic policy politico economic models and international political economy

agricultural policy decisions in the ec consequences of institutional imbalance abstract in almost all developed countries agriculture is protected by state interventions of a differing nature and degree subject to political decisions these decisions are determined by the institutional framework of the relevant decision making process in this article it is demonstrated that the institutional framework of the ec differs to a large degree from those in most parliamentary democracies such institutional peculiarities favour the transformation of political interests of farmers into decisions on farm policy by the council of ministers largely because of a lack of countervailing checks

assessment of instruments in facilitating investment in off grid renewable energy projects abstract renewable off grid solution plays a critical role in supporting rural electrification however off grid renewable energy ogre project financing faces significant challenges due to limited financing access low affordability of consumers high transactions costs and etc various supporting instruments have been implemented to facilitate ogre investment this study assesses the effectiveness of those instruments with a framework consists of three dimensions feasibility sustainability and replicability the weights of each dimension in the framework and the scores of each instrument are assessed by expert surveys based on the delphi method it is suggested that all the three dimensions should be taken into consideration while assessing the instruments among which feasibility and sustainability are considered as the most important dimensions in the assessment framework furthermore the top 5 most effective instruments in facilitating ogre investment are local engagement in operation and maintenance loan guarantee start up grant end user financing and concessional finance developing countries that need to increase electrification such as most of the asean member states could use these top scored instruments despite of their limited amount of public finance

economic development institutional change and the political economy of agricultural protection an econometric study of belgium since the 19th century this empirical study uses 100 years of annual data on 11 agricultural commodities from belgium to measure the impact of structural changes coinciding with economic development and changes in political institutions on agricultural protection the analysis shows that changes in agricultural protection are caused by a combination of factors governments have increased protection and support to farmers when world market prices for their commodities fell and vice versa offsetting market effects on producer incomes other economic determinants were the share of the commodities in total consumer expenditures negative effect and in total output of the economy positive effect with belgium a small economy there was no impact of the trade position changes in political institutions have affected agricultural protection democratic reforms which induced a significant shift in the political balance towards agricultural interests such as the introduction of the one man one vote system led to an increase in agricultural protection the integration of belgian agricultural policies in the common agricultural policy in 1968 coincided with an increase in protection ceteris paribus both institutional factors related to changes in access to and information about the decision making at the eu level and structural changes in the agricultural and food economy may explain this effect

an empirical investigation of paradoxes reswitching and reverse capital deepening in capital theory this paper examines the empirical relevance of the capital controversy the price model of sraffa and the dual models of the price and quantity systems of von neumann become the basis of the investigation in the course of the controversy it proved easy to construct theoretical examples which contradicted the fundamental neoclassical hypothesis of an inverse capital demand function this paper presents empirical examples for the first time thiry two input output tables from the oecd database serve as data as a result one envelope is found which involves reswitching reverse substitution of labour or reverse capital deepening are observed in about 3 65 of tested cases they involve at least two switchpoints copyright 2006 oxford university press

changing sunshine analyzing the dynamics of solar electricity policies in the global context abstract although solar costs have been dropping in recent years solar power is still more expensive than conventional and other renewable energy options and in most applications solar power still needs continuing government policy support however the need to achieve multiple objectives and ensure sufficient political support for solar power makes it difficult for policy makers to design an optimal solar power policy the dynamic and uncertain nature of the solar industry combined with the constraints imposed by broader economic political and social conditions further complicates the task of policy making in this paper we present a framework to critically analyze the objectives behind different country policies how factors such as macro economic conditions and development paradigms affect the policy outcomes and finally how these outcomes affect the overall cost reduction of solar energy we find that while the extent of cost reduction through creation of large demand remains to be seen it is essential for governments to provide adequate support for leapfrog rd d and exploit real comparative advantages across countries for effective solar cost reduction policy makers need to optimally design their policies by balancing national objectives and paying capacity with the global objective of solar power cost reduction in order to realize its full potential

evaluating renewable energy based rural electrification program in western china emerging problems and possible scenarios renewable energy technologies offer an economically viable and environmentally suitable scenario towards addressing energy requirements for rural livelihoods china s renewable energy rural electrification program initiated in 2001 is an effort to employ renewable energy technologies on a large scale for rural electrification the program has been designed with several stages this paper firstly offers an analysis of the problems encountered during the progress of this rural electrification program using data obtained from field survey of representative areas in western china where the first stage of the program was implemented the paper then explores feasible solutions in order to address existing rural energy issues and provide long term reliable energy service for remote communities in support of future course of development of renewable energy application for rural energy demands policy recommendations are provided

endogenous price policies and international wheat prices vanzetti and kennedy s herein vk comment on our earlier paper sarris and freebairn gives us the opportunity first to clarify the differences in the models to present a generalization of the analysis that includes their results as well as ours as special cases and then to point out some salient features of our model that seem to have been unnoticed by them consider our model of a homogenous commodity produced consumed and traded by n countries which are characterized by the following linear demand and supply curves notation follows vk except that we maintain the additive random variables and hence keep the time subscript

a game theoretic model of endogenous public policies public policies are the equilibrium outcome of a cooperative game among interest groups and the policy maker this study stresses the interdependence between policies and players bargaining strengths and derives their comparative statics with respect to a changing economic environment it also provides a specification of behavioral equations consistent with the underlying bargaining process an analysis of the political economy of food and agricultural price policies in senegal illustrates the proposed framework

the political economy of u s wheat legislation bruce a babcock colin a carter and andrew schmitz both taxpayer subsidies to u s wheat producers and domestic deadweight losses increased as a result of the u s wheat program adopted in 1985 a calculation of the costs and benefits of alternative wheat policies shows that mandatory production controls with no taxpayer expense could have made wheat producers as well off as the adopted policy becker s theory of competition among interest groups and peltzman s theory of the equilibrium amount of regulation are shown to be consistent with the observed policy choice if the list of affected interest groups includes agricultural input suppliers and grain marketing firms i introduction every five years congress drafts new farm legislation dictating the provisions of commodity programs for cotton and the major food and feed grains for the subsequent five years from 1973 through 1985 the primary features of the commodity programs were guaranteed farm prices and government stockholding activities deadweight losses from the programs during this time were minimal market prices were generally higher than the government defended price floors because of a booming export market legislated increases in commodity support prices combined with a severe drop off in the demand for agricultural exports beginning in 1982 increased the economic costs of the commodity programs the u s price floor became the world price for wheat cotton and corn grain stocks accumulated while government payments to u s farmers grew to unprecedented levels most agricultural interest groups in 1984 agreed that an overhaul of agricultural policy was necessary supporters of large levels of production and exports wanted to stimulate the demand for exports by eliminating price floors others felt that the united states should reduce budgetary costs by using direct supply controls to raise farm prices the clear winners in the new 1985 farm bill were the proponents of maintained production levels and expanded exports the new policy froze the relatively high supply prices received by farmers while simultaneously lowering price floors becker 1983 argues that two forces mainly determine the outcome of policy debates the first following stigler 1971 and peltzman 1976 is the relative efficiency with which interest groups exert political pressure interest groups that are efficient in exerting political pressure can increase the subsidization or decrease the tax burden of their constituents the second force is the extent of deadweight losses associated with proposed policies those policies with lower deadweight losses are ceteris paribus more likely to be adopted for the simple reason that less tax needs to be collected from losing interest groups for given transfers to winning groups gardner 1987 finds empirical evidence that both the ability to redistribute efficiently and the effectiveness of political organizations help explain which farm commodities have received the most government support since 1930 his study provides little insight however into which force is more important in determining the type of redistribution policies that are ultimately adopted for a given commodity an examination of the wheat program adopted in the 1985 farm bill and alternative policies that were rejected provides an opportunity to determine whether the efficiency of programs or the political prowess of interest groups is more important in determining policy outcomes this task requires a calculation of the magnitudes and the distribution of costs and benefits of the chosen policy and alternative policies costs and benefits are calculated for 1 a continuation of the 1981 farm bill policies through 1986 1990 2 the adopted 1985 farm bill policies and 3 mandatory production controls all three alternatives are examined relative to a laissez faire policy whereby the u s government has no direct involvement in agriculture

efficient income redistribution for a small country using optimal combined instruments abstract in this paper i improve gardner s surplus transformation curve framework by assuming that governments are able to vary many policy instruments simultaneously instead of only one i use my framework to find the combination of the currently used instruments which provides the most efficient income redistribution for the austrian bread grains market comparing the most efficient policy with the actual policy reveals that 464 10 6 austrian shillings were wasted i theoretically compare for a small country the transfer efficiency of every possible pair of the four major agricultural policy instruments floor price production quota co responsibility levy and deficiency payments without considering the marginal cost of public funds mcf deficiency payments cum quota equal to a fully decoupled direct income support is the most efficient policy succeeded by floor price cum quota and floor price cum deficiency payments if the mcf is taken into account the ranking crucially depends on the market parameters the transfer level and the value of the mcf for the austrian bread grains market i empirically demonstrate that given the present support level a fully decoupled direct income support redistributes income most efficiently as long as the mcf is lower than 1 17 beyond this value a floor price cum quota policy becomes more efficient a floor price cum deficiency payments policy is never superior to the floor price cum quota

a review on global wind energy policy with the increasing negative effects of fossil fuel combustion on the environment in addition to limited stock of fossil fuel have forced many countries to inquire into and change to environmentally friendly alternatives that are renewable to sustain the increasing energy demand energy policy plays a vital role to mitigate the impacts of global warming and crisis of energy availability this paper explores the wind energy industry from the point of view of the wind energy policy it is noticed that energy policy could help increasing wind power generation as well as stimulating the energy industry it may be stated that without specific energy policy a country would not be able to solve the acute problems like reducing greenhouse gases ghgs emission scarcity of energy etc this paper discussed the existing successful energy policies for few selected countries based on literatures it has been found that fit rps incentives pricing law and quota system are the most useful energy policies practiced by many countries around the world then status of wind energy policy for malaysia was investigated and compared with few selected countries around the world

european community enlargement and world trade in fruits and vegetables world trade models for the product classes fresh fruits dried fruits processed fruits fresh vegetables and processed vegetables are estimated and used to project the impact on export prices and trade patterns likely to arise after the european economic community enlargement with greece portugal and spain the results indicate that current world trends in import demands and export supplies if continued and in the absence of enlargement will cause marked declines of export prices for four of the above product categories except dried fruits the enlargement will not significantly modify these price projections but it will divert a significant part of european community imports of these products to the three new member countries on 1 january 1981 greece became the tenth country to join the european community ec spain and portugal have also applied for full ec membership and negotiations are underway with an anticipated date of both spanish and portuguese accession of 1986 agriculture has loomed large in the enlargement negotiations with spain greece and portugal sgp given that the national product in these three countries depends much more on agriculture than in the average country of the former ec nine within agriculture

fixed feed in tariff versus premium a review of the current spanish system a b s t r a c t since 1998 the spanish government established a feed in system where res e generators could choose between two alternatives fixed feed in tariff and premium nowadays all res e 1 can be sold in the electricity market getting an additional premium except for solar photovoltaic one important novelty established in 2007 is a cap and floor system for facilities under the premium option the aim of this paper is to analyze and compare these two alternative options fixed fit and premiums which coexist at the same time in spain describe the evolution of both systems and evaluate its performance the introduction of this support system in spain led to very good results in terms of res e deployment the main advantage of the premium option is that it is a scheme integrated in the electricity market one disadvantage is that it can occasionally lead to overcompensation one way to try to avoid it is to set a cap value in order to evaluate the performance of this dual support system not only res e deployment has been assessed but also the policy stability the adequacy of res e production to the electricity demand pattern and the changes in the investors behaviour

determinants of the u s wheat producer support price do presidential elections matter the paper s focus is on the determinants of the u s wheat producer support price the results of the time series analysis suggest that this price is largely determined by the previous price the expected u s share in world exports and expected program costs presidential elections also influence u s wheat price policies all other things being equal the support price tends to be lower in election years than in other years this suggests that small interest groups relative political economic power may be less pronounced in election years if they do not succeed in positioning themselves on the political economic market such that they contain the potentially decisive voter

objectives and constraints of government policy the countercyclicity of transfers to agriculture estimates of government transfers to typical u s corn wheat and cotton farms are regressed on estimates of market derived farm income to show that u s farmers receive greater government transfers when they face relatively unfavorable market conditions this transfer countercyclicity is shown to be unrelated to potential deadweight losses constraining government transfers it is argued that prevailing political economy models have difficulty explaining transfer countercyclicity because they focus on political agents constraints to the neglect of political agents objectives

political preference functions and public policy reform a model of policy making is developed where governments seek to maximize support from social groups through the combination of both pert social welfare increasing and pert welfare transferring policies the implicit weights of a political preference function shift with a change in the relative cost of interest group organizing attention is paid to the degree of wealth transfers as total social welfare increases because of pert policy changes the model demonstrates that in the case of two competing groups the weight given to one group in the allocation of social surplus will increase as total social welfare increases with a bias toward the other group the relative weights placed on consumers and producers based on pest policies alone are misleading indicators of the political influence of groups a number of general implications of this political economic analysis for the reform of public policies are investigated

economic theory and farm politics what can economics offer in the explanation of politics the first accomplishment is to reduce the subject to a maximization problem analogous to others encountered in economic theory a second accomplishment is to make this problem interesting to make it really illuminating about politics both steps are difficult and the accomplishments have been only partial viewing politics as maximization may seem unreasonably austere and narrow but it is what distinguishes the contribution of economics from that of political scientists or more general social observers empirical work by economists on farm politics typically brings in these broader concerns but this paper attempts instead to justify the narrower approach and to explore its implications its organization is first to spell out details of the contribution of economic theory to explaining politics second to review work on agricultural policies in relation to this theory and finally to discuss implications for positive versus normative economics in policy analysis

economists and public policy chicago political economy versus conventional views both conventional welfare economics and public choice analysis suggest that economists have an important educational role to play in the public policy process in improving the decision making process in sharp contrast information and incentive problems related to voting rules the bureaucracy and the legislature do not arise in cpe because these processes are all perfect agents of interest groups consequently the political process is efficient and there is no scope for beneficial economic analysis as it relates to the sugar program or other public policies that is the polity is efficient or it would be reordered by competing interest groups to make it so but as mitchell 1989 290 stresses the important unanswered question in cpe remains if there is no scope for improvement how and why does change occur

institutional change in the common agricultural policy of the european community the common agricultural policy cap of the european community ec is a complex institutional structure with major effects on world agriculture this study analyzes the cap from a public choice perspective as a case of induced institutional innovation the demand for change is analyzed as a function of a newly enlarged community time consuming decisions unequal distribution of net benefits increasing budget expenditures and rising pressures to renationalize farm subsidies drive the demand for change alternative institutional arrangements respond to these demands which reflect preferences for fairness and equity as well as improved efficiency in the cap

directly unproductive profit seeking dup activities this paper propses directly unproductive profit seeking dup activities as a general concept that embraces a wide range of recently analyzed economic activities including the subset of rent seeking activities considered by krueger it then proceeds to provide a synthesis and generalization of the welfare theoretic analysis of such activities by developing a fourfold categorization of cases depending on the levels of distortions before and after the dup activity thus a unification and overview of the subject are achieved

causes of u s farm commodity programs this paper i s an attempt to explain variations by commodity in producer protection afforded by farm price support programs since the1930s particularly emphasized are theideas that these programs are essentially income redistributional measures and that given political forces the programs are attempts to redistribute efficiently variables associated with the cost to producers of generating political pressure and the social cost deadweight losses of redistribution are both found to be empirically important copyright 1987 by university of chicago press

strategic arms limitation treaties and innovations in weapons technology treaties to limit strategic arms such as those resulting from the strategic arms limitation talks salt are generally viewed as resulting in a reduced level of military spending and an increased level of security for both countries this paper shows that such treaties generally would accelerate the qualitative arms race and could lead to the introduction of new and potentially destabilizing weapon systems thus the result might be an increase in military spending and a decrease in the level of security for both countries this result is supported by a formal model of bureaucratic decision making in which defense bureaus choose between purchases of existing weapons systems or research and development expenditures on new weapons systems the formal model leads to two theorems which identify the conditions under which arms limitation treaties lead to innovations in weapons technology and to increased military spending

a critical assessment of the political preference function approach in agricultural economics abstract the policy preference function ppf approach has become popular with economists seeking to explain the origin of government policies in this paper a distinction between positive and normative work with the ppf concept is made positive work is shown to suffer from a variety of shortcomings including the misspecification of traditional ppfs and the failure to consider the importance of institutions constraints and the interaction between different commodity policies these weaknesses are reflected in the counter intuitive results of a simple ppf model designed to reflect the interaction between the ec s wheat and barley policies furthermore it is demonstrated that ppf weights change as a result of both political preferences and market parameters hence changes in ppf weights cannot be attributed to changes in preferences alone test of the axioms of revealed preference theory are used to demonstrate that even though ppf weights derived for the ec s wheat and barley markets have fluctuated considerably since the early 1970s we are not able to conclude that there has been a shift in political preferences the paper concludes with some comments about the use of ppfs in a normative framework the underlying assumption that policy makers optimise seems not surprisingly often to lead practitioners to the conclusion that observed policies are not so bad after all economists should also beware of the tendency to overlook possible differences between the ppf and the social welfare function

in search of rational government what political preference function studies measure and assume political preference function ppf studies assume that policy making can be described by a mathematical problem in which a rational government maximizes a function of interest groups welfares the purpose of my paper is to explain in depth ramifications of ppf study assumptions and methodology ppf studies that attempt to measure interest group political power do so by measuring marginal rates of transformation along a pareto frontier one can estimate political power with a ppf only if observed policies are pareto efficient which may depend on the assumed number of interest groups and policy instruments marginal rates of transformation need not reveal anything meaningful about interest group political power and may incorrectly measure the direction of transfers

political criterion functions and the analysis of wealth transfers agricultural economics devotes much attention to analyzing market interventions and their distributional implications recent research emphasis has shifted from the analysis of policy effects toward explaining the underlying causes of farm policy gardner 1983 one popular research tool in analyzing the latter issue is the metaphor of aggregate rationality policies are the outcome of a single optimization problem that balances the welfare of conflicting pressure groups the criterion function that rationalizes policies is often called a political preference function e g rausser and freebairn in the present paper we investigate two assumptions underlying agricultural economic models of the political economy of wealth transfers that the political process is indeed characterized by aggregate rationality as questioned by bates 1989 and that governments objectives are limited to fiscal concerns and political rewards from pressure groups many studies posit that individual rationality in rent seeking leads to a form of aggregate rationality in policy outcome gardner 1983 rausser and freebairn other studies describe policy formation as a bargaining game leading to the maximization by a single policy maker of a criterion function of groups welfare measures zusman rent seeking activities by interest groups determine the weights given individual surplus measures in the criterion function roe and graham tomasi rausser and de gorter a surplus possibility or transformation set constrains this maximization of a weighted sum of surpluses one infers the relative weights on group s welfare from the marginal rates of transformation of one surplus measure into another why might this model of aggregate rationality make sense the political process often leads to enforceable contracts e g the u s farm bill which are outcomes of a recurring and predictable process e g five year farm bill cycle enforcement mechanisms and the repeated nature of the political economic process make plausible the use of cooperative game theoretic arguments i e the assumption of a pareto efficient political equilibrium shubik studies typically treat the government as a monolithic actor fafchamps sadoulet and de janvry lopez oehmke and yao and some studies additionally posit cooperation of all players in the political economic game love rausser and burton the aggregation of individual rational behaviors of rent seekers and government agencies may not lead to a cooperative game equilibrium bates 1990 north 1991 the folk theorem admits many solutions to a bargaining game and does not necessarily lead to pareto optimality fudenberg and maskin by contrast the original rent seeking literature as opposed to the cooperative efficient view of government choice posits government inefficiency as a cornerstone tullock the existence of deadweight losses associated with transfers is prima facie evidence of inefficiency in addition enforcement mechanisms are often incomplete and costly north 1990 and governments may have a vested interest in incompletely enforced property rights which exacerbate rent seeking and inefficient outcomes this problem of aggregate rationality we term the integrability problem of policy choice that is can one recover a well behaved criterion function from a set of equations describing observed policy outcomes the second assumption regarding government behavior has a strong and weak form the strong assumption excludes government as a fullfledged player in the political economic game algebraically speaking the government s objohn beghin and william foster are assistant professors department of agricultural and resource economics north carolina state university the authors thank d s bullock for his comments d burton l karp a love and g rausser for helpful discussions

socio economic development and electricity access in developing economies a long run model averaging approach abstract access to electricity continues to be a popular subject in empirical studies however the choice of key factors related to electricity access in the literature to date has been ad hoc due to the lack of a theoretical framework this paper adopts a bayesian model averaging bma approach to selects important factors related to electricity access from 26 socioeconomic indicators using a sample of 48 developing countries and reveal their long term relationship with electricity access the bma approach allows us to identify the optimal empirical model when a theoretical foundation is not available moreover it allows us to address the relative importance of variables using posterior inclusion probabilities and thus has clear policy relevance our results show that access to finance education economic development infrastructure and industrialisation are positively related to electricity access in the long run although the long run relationship does not indicate causality it shows that to maintain this relationship policy adjustments against any deviations from the relationship are needed our study suggests that electrification needs not only economic educational and infrastructural development but also private sector participation governments commitment and political will and integration with poverty reduction and other development schemes

the empirical measurement of rent seeking costs this survey focuses on the efforts carried out mainly by public choice scholars to measure the social cost of rent seeking the concept introduced by gordon tullock in 1967 and coined by anne krueger in 1974 is well known and accepted by the profession but its empirical measurement has fallen behind with respect to its theoretical formulation an often criticized lack in the literature although there are good general surveys none has specifically focused on reviewing the empirical efforts made to measure the phenomenon the purpose of this paper is to provide such a survey it could be said that the rent seeking concept has been fully integrated into economic jargon it is commonly used when some agent seeks to obtain an artificial transfer usually from government and covers all the actions efforts or expenses that the agent has to carry out to obtain the prize the key issue however is the possible social waste that arises in these situations the empirical efforts to measure such waste constitute the main purpose of this survey the concept of rent seeking was introduced by tullock 1967 although the term was first coined by krueger 1974 in a paper not related to the former in a recent paper tullock himself wrote of the history of the concept and the intellectual context within which it arose tullock 2003 starting with the pioneering work by harberger 1954 several studies were conducted during the 1950s in which the calculation of the social cost of monopolies and tariffs always gave the result of very modest figures the first response to these results was made by leibenstein 1966 and his x efficiency which refers to a hypothetical loss in efficiency due to the absence of competition shortly after leibenstein s paper appeared tullock argued that the deadweight costs of monopoly and tariffs understate the true social cost because the expenditures made to capture related rents have to be included so rectangles as well as harberger s triangles have to be included in the calculations let us see this argument once more figure 1 depicts the iconic tullock graphic analysis of rent seeking it represents the demand schedule d for a monopolized good where pm is the monopoly

pure joint production and international trade a note this paper applies the principles of the neo ricardian or sraffian theory of international trade to certain joint production systems it is shown that in contrast with single product systems i there is not always a pattern of international specialisation which would entail the increase of the real wage rate in both economies and ii the law of comparative advantage has no general validity furthermore not only the existence of such a pattern of specialisation but also the validity of this law depend on the values of the variables of distribution of income the analysis is wholly based on two of the numerical examples formulated by bidard in 1997 and further generalised in an elementary way only when this is considered necessary copyright 2004 oxford university press

are government transfers efficient an alternative test of the efficient redistribution hypothesis the efficient redistribution hypothesis says that no available government policies are pareto superior to observed government policies efficient redistribution from government policy is a central tenet of much recent theoretical and applied political economy literature in this paper limitations of previous attempts to test the efficient redistribution hypothesis are discussed and an alternative test of the efficient redistribution hypothesis that uses vector optimization theory and bootstrap methodology is presented

endogenous supranational policy decisions the common agricultural policy of the european community the analysis of the supranational ec decisions on the cap indicates that they are endogenous and could largely be explained by past income growth and the development of budgetary expenditures prevailing at the time of the price decisions the empirical results corroborate the hypothesis that monetary compensatory amounts are integral part of common price decisions agricultural income growth could be explained by past price policy decisions whereas budget expenses are determined by u s world market prices and the exchange rate of the ecu against the u s

technological learning in offshore wind energy different roles of the government offshore wind energy is a promising source of renewable electricity even though its current costs prevent large scale implementation technological learning has improved the technology and its economic performance already and could result in significant further improvements this study investigates how technological learning takes place in offshore wind energy and how technological learning is related to different policy regimes offshore wind energy developments in denmark and the united kingdom have been analysed with a technology specific innovation systems approach the results reveal that the dominant forms of learning are learning by doing and learning by using at the same time learning by interacting is crucial to achieve the necessary binding elements in the technology specific innovation system generally most learning processes were performed by self organizing entities however sometimes cultural and technical barriers occurred excluding component suppliers and knowledge institutes from the innovation system danish policies successfully anticipated these barriers and removed them therefore the danish policies can be characterized as pro active british policies shaped stable conditions for learning only therefore they can be characterized as active in the future barriers could hinder learning by interacting between the oil and gas industry the offshore wind industry and academia based on this study we suggest national and international policy makers to design long term policies to anticipate these barriers in order to contribute to technological learning

a policy preference function for government intervention in the u s wheat market this paper estimates a policy preference function that explains the government s choices of target prices government held wheat stocks and public wheat research funding the policy preference function depends on producers surplus consumers surplus and budget expenditures an important innovation in this paper is the inclusion of interactions between public research expenditures and other public policy variables results indicate that the government places a premium of 25 to 45 on the welfare of wheat producers of relative to budget expenditures while wheat consumers welfare is discounted as much as 50 relative to budget expenditures the purpose of this paper is to provide an explanation of government commodity programs stock accumulations and research expenditures in the u s wheat sector the explanation is based on a policy preference function ppf that depends on producers surplus consumers surplus and budget expenditures it is assumed that target prices reductions in or additions to government stocks and public research expenditures are chosen to maximize the policy preference function the central contribution of the paper is the estimation of a function that is consistent with the observed government interventions in the u s wheat market that is the paper explains the observed target prices government sales and public research expenditures as rational behavior by a government which seeks to maximize the estimated policy preference function the approach in this paper is based on the political interest group theories of peltzman and becker applications of these ideas to agriculture include rausser and freebairn s description of the beef industry gardner s 1985 analysis

efficient redistribution through commodity markets efficiency in redistribution is measured in terms of deadweight loss generated per dollar of economic surplus transferred between consumers and producers of a commodity by means of market intervention the implications of supply and demand elasticities for efficiency in redistribution are examined with special attention to the comparison of production control and deficiency payment programs the results may be used to aid in the evaluation of commodity programs and as a basis for consideration of the hypothesis that observed policies are efficient given the political power of interest groups

valuing investment decisions of renewable energy projects considering changing volatility abstract volatility is an important parameter when evaluating investments using the real options method for renewable energy investments the volatility of cash flow continuously changes because as new information and knowledge are gathered there is less foreseen variation this paper proposes an extended recombining trinomial tree model where the changing volatility is used to generate transition probabilities the changing volatility is generated using a consolidation process where multiple random variables including the market price of electricity carbon price and lending rate are integrated into a low dimension stochastic process a two factor learning curve is used to model the changes of investment cost we apply the proposed model to analyze solar photovoltaic pv power generation investment in china the results show volatility with changing feature compared with constant volatility changing volatility may advance investment decisions and change the project value complete grid parity policy in the solar pv industry is infeasible because the opportunity cost brought by the option of delaying cannot be offset the changing volatility may produce a lower and equally effective subsidy level compared with constant volatility a carbon emission trading scheme is helpful in advancing investments in renewable energy which is reflected in improvements in project value advancements in investment decisions and reductions in the required subsidy level

price support acreage controls and efficient redistribution this study is concerned with the combination of target price and acreage controls as the two major mechanisms of farm policy acreage controls are shown to enhance the efficiency of redistribution under a target price program more specifically this study demonstrates that if the traditional cobb douglas production function is assumed acreage controls do not enhance the efficiency of target price programs in the process of redistributing income to the farm sector the study proves that if the elasticity of substitution between land and all other inputs is less than one then the income redistributional costs are likely to be reduced moreover by using an empirical estimate of the elasticity of substitution and farm data for the time period 1984 88 this study demonstrates that acreage control programs have drastically reduced the deadweight losses associated with income redistribution flowing from target price programs these results lend strong support to the public choice notion that politicians favo

a critical assessment of the political preference function approach in agricultural economics the political preference function ppf approach has been used often in the agricultural economics literature in attempts to explain the causes of farm policy the fundamental assumption of ppf studies is that government selects levels of policy instruments such that it maximizes a function of interest groups welfare measures for the purpose of acquiring maximum political support ppf studies often use the familiar neoclassical constrained maximization problem to measure relative political powers of interest groups involved in policy determination some weaknesses of the ppf approach have been discussed in the literature gardner 1989 alston and carter 1991 and von cramontaubadel vct 1992 while each of these critiques provides valuable insight into ppf methodology and its limitations none of them clearly explains the simple fundamental structure of the ppf framework this neglect of certain fundamentals has led to confusion in the litera

structure of agricultural protection in industrial countries abstract the nominal rates of agricultural protection in ten industrial countries from 1955 to 1980 are estimated with the same commodity coverage and data definitions a regression analysis is conducted to explain variations in the measured level of agricultural protection in terms of political as well as economic factors nearly 80 percent of the variations is accounted for by differences in agriculture s comparative advantage agriculture s share in total economy the international terms of trade between agricultural and manufactured commodities regionalism eec and food security consideration associated with non military alliance

explaining price policy bias in agriculture the calculus of support maximizing politicians a model is developed to explain observed patterns of policy intervention in agriculture we analyze the interaction between political support seeking politicians and supportsupplying citizens society consists of a rural and urban group we determine the effects on transfers of relative group size disparities in income endowments between groups and the deadweight loss of redistribution the framework advanced is an alternative to that of the interest group model and is used to explain for example why the export sectors in developing countries are taxed more and why the united kingdom is less adamant for higher price supports than germany

evaluation of electricity supply sustainability and security multi criteria decision analysis approach abstract electricity supply plays a significantly important role in national economy and society development accordingly the evaluation of electricity supply sustainability and security as an early warning method is beneficial for the decision makers policy makers to take various measures to enhance electricity supply sustainability and security this study aims at developing a multi criteria decision analysis framework for electricity supply sustainability and security evaluation and a total of nine metrics i e shannon weiner index electricity import dependence supply adequacy rural electrification rate electric power losses ratio residential consumption ratio electricity per gross domestic product electric power consumption per capita and fossil fuel dependence in four dimensions including availability and security of supply affordability and reliability energy and economic efficiency and environmental stewardship were employed for electricity supply sustainability and security evaluation fuzzy analytic hierarchy process which allows the users to use linguistic terms to express their opinions was used to determine the weights of the criteria which represent their relative importance in the evaluation of electricity supply sustainability and security grey rational analysis was used to prioritize the status of electricity supply sustainability and security of different countries in different years the electricity supply sustainability and security of the five major emerging national economies brazil russia india china and south africa was studied in chinese perspective by the proposed method

evaluating the behavior of international cartel members some phenomena of interest in international trade can be understood by looking at only one country pushing others into the background sometimes though to preserve the essence of a problem one must attempt to take explicit account of the interaction of nations this viewpoint invites one to treat a collective body in this case a group of countries as a deciding unit there is no shortage of applications that call for such thinking among them are the gatt negotiations and nafta international commodity agreements and international cartels in each of these the idea of treating the collective as an organic decision maker is alluring and to be sure much has been gained in this fashion there are also dangers that attend adopting such a modeling strategy our purpose is to lay out these dangers their source and effects and then to introduce briefly some remedies that have become available lately does a group optimize the essence of the methodology of economics inheres in the treatment of decision makers as optimizers attributing to them an objective criterion and the impulse to behave optimally can this methodology be used in studying group decision making arrow showed that in a certain formal sense it can

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

strategic agricultural trade policy interdependence and the exchange rate a game theoretic analysis strategic agricultural trade policy interdependence is modeled using a game theoretic framework the model distinguishes between the european community the united states and a politically passive rest of the world particular emphasis is placed on the effect of the exchange rate on the equilibrium outcome of this game without compensatory payments to those with the highest political influence the results suggest that only modest reform is possible with compensation liberalization occurs but free trade is not obtained simulations also indicate that the u s gains incentive to reduce protection given a depreciation of the dollar while incentive to liberalize trade policies decreases as the dollar appreciates

wind electricity in denmark a survey of policies their effectiveness and factors motivating their introduction this paper surveys the development of the policies supporting the introduction of wind electricity in denmark in the last 15 years with special attention to the new policy introduced after a 2 year long debate the aim of this paper is to explore the roles of financial support policy certainty and planning constraints in the diffusion of wind electricity in denmark and the reasons prompting the change of the system in the current decade it is discovered that political uncertainty has badly affected the effectiveness of the feed in law in the years immediately after its introduction with regard to the new system it is concluded that the change has been prompted by generous conditions under the feed in law and by the desire to facilitate the modernisation of old turbines it is also concluded that incentive based systems can be more effective than tradable quotas in promoting the modernisation of renewable plants this finding is relevant to the development of energy policy in countries such as germany and spain where the average age of wind turbines is much younger than those existing in denmark

rent seeking and the welfare cost of trade barriers this paper estimates the potential social cost of trade barriers using the harberger and the tullock posner approaches for a sample of u s food and tobacco manufacturing industries in addition it tests the relationship between the computed welfare losses and special interest political activity pac contributions if all rents were dissipated through rent seeking the social cost of trade barriers would be about 12 5 percent of domestic consumption and would be particularly large for sugar and milk products where quotas are the main instrument of protection furthermore the results indicate that welfare losses are positively associated with industry lobbying but the strength of such association is strongly dependent on industry concentration

a positive theory of agricultural protection the present paper analyses the political economy of agricultural protection in a general equilibrium framework rational politicians offer protectionist policies in return for political support from their constituency individuals in the economy have different factor endowments politicians exploit these differences in establishing redistributive policies when maximizing political support changes in economic variables such as the urban rural income gap capital intensity the share of agriculture in total output and total employment and the share of food in consumer expenditures affect the political equilibrium policy the analysis concludes that the observed correlation between economic development and agricultural protection is caused by a multiplicity of factors

is small beautiful a multicriteria assessment of small scale energy technology applications in local governments in its 2003 white paper the uk government set ambitious renewable energy targets local governments and households have an increasing role in the overall energy system as consumers suppliers of smaller scale applications and citizens discussing energy projects in this paper we consider if small scale or large scale approaches to renewable energy provision can achieve energy targets in the most socially economically and environmentally see effective way we take a local case study of renewable energy provision in the metropolitan borough of kirklees in yorkshire uk and apply a multi criteria decision analysis methodology to compare the small scale schemes implemented in kirklees with large scale alternatives the results indicate that small scale schemes are the most see effective despite large scale schemes being more financially viable the selection of the criteria on which the alternatives are assessed and the assigned weights for each criterion are of crucial importance it is thus very important to include the relevant stakeholders to elicit this information

research and development aspects on decentralized electrification options for rural household abstract low income households living in the rural areas suffer from energy poverty and lack of human and economic development currently many governments of less developed countries are committed in improving access to electricity the same commitment should be adapted globally as part of human right because providing electricity access to low income households improves health and education generates income increases productivity reduces inequality and enhances the quality of life rural electrification is a complicated issue because of user affordability rural inaccessibility and remoteness low population densities and dispersed households low project profitability fiscal deficit scarcity of energy resources population growth lack of professionalism and over dependence on subsidies the demand for electrification cannot be accomplished because of the increasing gap between rural electrification rate and population growth therefore this review aims to study various decentralized household sized energy technologies available in rural areas such as battery diesel generator pedal generator pico hydro photovoltaic pv solar home system and wind preference for one of the options depends on energy source availability economic feasibility rural economic development disposal of residues nature of end user application and government programs and policies pico hydro is the preferred electricity generation source in most rural households followed by wind pv and diesel generators this paper concurs that households in rural areas will be able to afford for electricity access if the payment schedule of the electrification cost is extended and interest rates and taxes if any are dropped

pure joint production the gap between the behaviour of single and multiple product systems is illustrated by numerical examples and simple economic arguments it appears that none of the usual laws of single product systems holds true in pure joint production even in the framework studied by schefold in a more general case the number of operated methods may fall short of that of commodities and the very notion of prices of pro duction is at stake schefold s analysis is thus challenged the study of pure joint production also sets a number of methodological questions which are fundamental for post sraffian economics

public policies pressure groups and dead weight costs abstract this paper presents a model of competition among special interest groups for political influence each active group exerts pressure to affect its taxes and subsidies where activities of different groups are related by the equality between total tax collections and total tax subsidies the dead weight costs and benefits of taxes and subsidies play a major role in our model an increase in the dead weight cost of taxation encourages pressure by taxpayers while an increase in the dead weight costs of subsidies discourages pressure by recipients various applications of the analysis are discussed