Promotion of the Agricultural Sector and Political Power in Austria

Abstract

In most industrialized countries farmers as a small and well orgnized group are ableto influence government decisions to get rent creating proposals enacted. Two different viewsare presented to explain why: the Chicagoan view (“Efficient Redistribution Hypothesis”)and the Virginian view (inefficient outcome of political bargaining). A vertically structuredempirical model of the Austrian farm sector is employed to test both hypotheses. Quantitativeresults of the welfare transfers from consumers/taxpayers to farmers and agribusiness firmsare derived and the political weights of these groups are presented.