Regulation Analysis as a Research Focus in Agricultural Economics

Abstract

jective is to understand the nature of this conduct and its underlying rationale. But the pragmatic reasons why economists undertake their investigations are two: (a) to predict future behavior and its social consequences, and (b) to alter (or regulate) that conduct or its effects in accord with given or perceived performance standards. These reasons are also central to the distinction between positive and normative economic analysis (Buse, pp. 23-24); the positivist perceiving his role as describing, rationalizing and predicting within a given institutional framework, the normativist extending his study to consideration of alternative institutional mechanisms used to achieve stated public or private goals. Economists have a long history of debating which analytical role is professionally appropriate (Bronfenbrenner, p. 7-8). While any serious study of the history of economic thought suggests that normative considerations have been fundamental to most new developments in economic theory and method, early and lingering insistence by many practitioners on striving for a form of scientific objectivity (presumably devoid of value judgments) has tended to place economists into either positive or normative ''camps.'' The discipline of agricultural economics is both outgrowth of the agricultural sciences and extension of economic analysis to agricultural problems (Taylor). From its beginnings, and into the present day, agricultural economics has been distinguished as discipline-one that initially addressed a range of social problems encountered as farmers, agribusinessmen, consumers and public bodies allocated their scarce resources to achieve various levels of food and fiber production, distribution and consumption. Now it has been broadened to include community and regional development, public decision making, and the application of economic analysis to the study of the use of other basic resources. As the scope of agricultural economics has expanded, it has retained a real world problem orientation. To the extent that the problems analyzed have a what-ought-to-be component, agricultural economic studies are implicitly or explicitly value-laden and take on a normative character. This conclusion (or assertion) does not simplistically suggest that all agricultural economic analysis is normative in nature, but it does emphasize that various types of normative economic analysis have been a leading hallmark of our discipline. Principally during the past two decades, extensive literature on the subject of the economics of regulation has come into existence (Grant, 1979). While some authors have identified the 1962 and 1971 articles by Stigler as groundbreaking (Peltzman), there appears to be a consensus that these and subsequent studies are an attempt to join neoclassical theory with 'institutional economics,' (Kahn p. VII) and that this type of work represents a rigorous and potentially valuable example of normative economic analysis. The purpose of this article is to explore the potential of regulation analysis-this developDale C Dahl is professor of agricultural and applied economics and adjunct professor of law, University of Minnesota. The author acknowledges useful ideas and suggestions from Winston W. Grant, Glenn L. Nelson, Willard F. Mueller, and James D. Shaffer but holds them blameless for errors found in this article.