11 harming agricultural producers. But in all high-income countries, the relative importance of various farm-policy instruments has changed significantly, and the contribution of pricedistorting measures has declined.

Some important stylized facts apply with little differentiation over time or between high-income and developing countries. The first, already mentioned, is the propensity for governments of both agricultural-exporting and agricultural-importing countries to insulate their domestic markets from international price fluctuations despite globalization tendencies elsewhere in the economy (Tables 6 and 7). The second stylized fact is that a strong anti-trade bias for agricultural industries persists (Figure 10), even though significant market-opening policy reforms have been instituted over the past few decades. This persistent anti-trade bias is also reflected in the stylized fact that the relationship between RRAs and agricultural comparative advantage is negative (Figure 6[b]). The third general stylized fact is the persistence of the individual dispersion in commodity assistance within the agricultural sectors of most countries (Table 3).

# **3. Explanation of the Stylized Facts: A Political-Economy Lens**

The lens of political economy provides a framework for identifying the causal mechanisms behind the variations in policy interventions over time and across sectors, individual commodities, and alternative policy instruments. It also allows us to draw implications for agricultural policy reform. In short, political and economic forces influence the strategic interactions among various interests in any public policy–making process. Various schools of thought in political economy<sup>11</sup> have provided insights into the conflicts between the public interest and special interests that naturally emerge in the design and implementation of public policies, including those that affect agricultural and food markets. Research in this field and many applications to agricultural and food policies have shown how various forces influence policy decisions and their implementation. Included among these factors are income distribution, economic structure, governance structures (including domestic political institutions and international organizations), ideology, and political organization.

Armed with the rich political-economic formulations that have emerged over the last few decades, it is possible to explain several of the stylized facts presented in Section 2.<sup>12</sup> They include not only the general tendency of countries in the course of their economic development to gradually move from taxing to subsidizing agriculture but also to counter international price –, to adopt policies with an anti-trade bias, to adopt new types of instruments, and, in some high-income countries, to reduce agricultural production assistance to farmers.

11 The historical origins of the political-economic lens can be traced back to the original architects of the economics discipline, namely Adam Smith, Mill, Wicksell, and Marshall, none of whom was a stranger to political-economic analysis. Modern political-economic analysis was initiated by Anthony Downs with his seminal 1957 book, _An Economic Theory of Democracy._ Many publications have surveyed the politicaleconomic literature during the last few years. General reviews of the literature have been presented by Mueller (2003) and Weingast and Whitman (2006). For reviews from leading economic journals focusing on gametheory formulations since the year 2000, the surveys of Dewan and Shepsle (2008a; 2008b) are invaluable. More specific reviews are available for trade policy (Grossman and Helpman 2001; 2002; Rodrik 1995); fiscal and monetary policy (Persson and Tabellini 2000); the relationship between governance structures and fiscal and growth-promoting policies (Persson and Tabellini 2003); and agricultural policies (de Gorter and Swinnen 2002; Rausser and Goodhue 2002).

> 12 For a review and assessment of six alternative schools of political-economic thought, see Rausser, Swinnen, and Zusman 2011, Chap. 1.