Endogeneous price and trade policy developments in Central European agricultrue

Abstract

Endogenous policy theory is used to explain developments in agricultural and trade policies in Central Europe (CE). There have been three phases since 1989. After the initial liberalisation, ad hoc interventions emerged to protect consumers and producers against the negative real income effects of economic reform. These ad hoc interventions were gradually consolidated into a policy package. Average CE agricultural protection increased after 1992, but large differences exist between countries and commodities. The differences are largely consistent with political economy predictions. Domestic political economy factors may stimulate further increases in agricultural protection as CE economies grow. International agreements could plan an important role in limiting CE agricultural protectionism. Copyright 1996 by Oxford University Press.