POLITICAL COALITION BREAKING AND SUSTAINABILITY OF POLICY REFORM

This paper examines the need and potential for coalition breaking in p olicy reform efforts related to agriculture and the environment. The o bjective is to consider traditional policy tools that can break existi ng political coalitions, given the powerful noncompetitive role of str ong interest groups such as government bureaucracy and large trading o rganizations. Choice of the policy mix is modeled as a cooperative gam e. A modification of the Nash bargaining solution is used to endogeniz e coalition formation. This framework is then used to examine the pote ntial for an external development agency to promote environmental inte rests in the policy formation process. The results explain how in some countries a small increase in strategic aid may achieve a major break through in policy reform even if past activities have been unproductiv e and how, in other countries, a major increase in aid may be fruitles s.