Political Preference Functions and Public Policy Reforms: Comment

Abstract

Rausser and Foster (1990) rightly note the importance for policy analysis of the link between a government's choice of economic policies and the welfare possibilities those policies generate. The authors envision a world where national-welfare-enhancing agricultural policies (PERTs) and national-welfarereducing agricultural transfer policies (PESTs) operate in tandem. policies, while typically thought of as welfare transferring and efficiency decreasing, can be welfare increasing when combined with PERT policies which, by themselves, may be impossible to implement (p. 642). The theme unifying the Rausser and Foster paper, and the example that they revisit repeatedly, sees PEST commodity programs, and the transfers to agricultural producers that they bring about, as compensation for losses to producers from PERT investments in science and technology. However, we contend that this trade-off does not occur, and for two reasons. First, and primarily, extant evidence indicates that publicly funded agricultural research has been beneficial, not detrimental, to agriculture in general and to farmers in particular. Second, if the PERT-PEST dichotomy is to inform policy debate in anything but a parochial sense, then it should be transportable to settings other then the United States policy arena. We provide evidence that in general it is not.