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Abstract
This paper builds on the literature on agricultural policy analysis under costly and imperfect
enforcement by analyzing the effect of enforcement costs and noncompliance on
the relative transfer efficiency of output and export subsidies. Analytical results show
that, in addition to changing the incidence of output and export subsidies, relaxing the
assumption of perfect and costless enforcement found in the traditional analysis of these
policy instruments can affect their relative efficiency in transferring income to producers.
The effect of enforcement issues is shown to depend on the way export subsidies are
being administered and the size of the exporting country.