The political economy of public research investment and commodity policiesin agriculture: an empirical study

The paper tests a political economy theory of simultaneous government decis ion-making on income redistribution through commodity policies and on publi c research investment in agriculture. We use data from 37 countries on agri cultural protection and public agricultural research expenditures (PARI). T he empirical results are consistent with the political economy hypotheses. The analysis suggest that structural changes in the economy have important effects on the political incentives for governments not only to subsidize o r tax farmers, but also to invest in public agricultural research. Furtherm ore, the analysis supports the hypotheses that the impact of such structura l changes on government decision-making on PARI is non-linear and condition al on other factors. Regarding the impact of political institutions, the re sults suggest that more democracy neither leads to more distortionary trans fers (agricultural protection), nor to lower investment in public goods (PA RI). (C) 2000 Elsevier Science B.V. All rights reserved.