Campaign Contributions and Agricultural Subsidies

This article examines the influence of campaign contributions on agricultural subsidies. Empirical results revealed that rent seeking works, i.e., campaign contributions of agricultural-related industries influence agricultural subsidies in the manner they best serve contributors' economic interests. Eliminating campaign contributions would significantly decrease agricultural subsidies, hurt farm groups, benefit consumers and taxpayers, and increase social welfare by approximately $5.5 billion. Although contributions are not the only determinants of agricultural subsidies, investment returns to farm PAC contributors are quite high ($1 in contributions brings about $2,000 in policy transfers). In fact, the results are in sharp contrast to the "truthful contributions" assumption of the Grossman-Helpman model.


Issue Date:
2001
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/25223
Total Pages:
20
Series Statement:
Research Report No. 59




 Record created 2017-04-01, last modified 2017-08-22

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