04-02 "The Paradox of Agricultural Subsidies: Measurement Issues, Agricultural Dumping, and Policy Reform"

World trade talks have foundered recently, in part due to developing country demands that industrialized countries reduce their large farm support programs to allow poor farmers in the global South to compete more fairly. Claiming that Northern farm subsidies amount to over $1 billion a day, and that the average European cow receives more in subsidies than the nearly three billion people who live on less than two dollars a day, Southern governments, farmer groups, and international aid groups have demanded steep cuts in Northern agricultural subsidies. This paper examines the economic and policy aspects of the subsidy debate. We begin with an examination of the most widely used measure of agricultural support, the OECD’s Producer Support Estimate. We identify several important flaws in its application and interpretation as a reliable subsidy measure, highlighting the particular problems this can cause in measuring the levels of farm support in developing countries whose economies may not be fully integrated with the world economy. We then review the results of economic modeling of trade liberalization and subsidy reduction, finding that overall such measures are unlikely to raise producer prices to a sufficient degree to bring relief from alleged agricultural dumping to Southern farmers by bringing export prices above production costs. We briefly examine one alternative explanation for low commodity prices, the oligopolistic nature of agricultural trade. We conclude with an outline for policy reforms at the global and national levels to address measurement flaws, raise commodity prices, and reduce the undercutting of developing country farmers by below-cost agricultural exports from the North. Throughout, we draw on US-Mexico trade in maize as an illustrative case study. We conclude that subsidy reduction is unlikely to reduce economic pressures on Mexican maize producers from below-cost US exports, nor are such measures likely to improve the economic prospects for similar small-scale farmers growing food primarily for subsistence and the internal market. Instead, policy reforms should focus on ending agricultural dumping, reducing global commodity overproduction in key crops, and reducing the market power of agribusiness conglomerates.

Accelerated Technological Progress - An Explanation for Wage Dispersion and a Possible Solution to the Productivity Paradox

Due to scarcity considerations an increase in the supply of college graduates should reduce the premium for this kind of qualification. Therefore it seems quite contradictory that a tremendous educational expansion in the USA is accompanied by rising wage dispersion (overall and between educational groups). A second seemingly paradox development, which occured simultaneously, is the reduction of the total factor productivity during the emergence of the computerage - the so called productivity paradox. This contribution offers a simple unified solution to both of these puzzles and explains the educational expansion by assuming accelerated technological progress: An increase in the speed of technological progress raises the economic value of prospective periods and therefore works in favor of timeconsuming higher qualifications. The resulting educational expansion firstly goes along with a composition effect which leads to wage dispersion. Secondly the additional absence from the labor market of some more able individuals, due to the longer qualification, as well as an increasing share of individuals who choose a less productive qualification may lead to a transitory slowdown of the productivity growth rate

Pledging, Populism, and the Paris Agreement: The Paradox of a Management-Based Approach to Global Governance

For many observers, the Paris Agreement signaled a historic breakthrough in addressing the problem of global warming. In its basic design, however, the Agreement is far from novel. Its dependence on each nation’s self-determined pledge to reduce greenhouse gases mirrors the domestic policy strategy called management-based regulation—a flexible regulatory approach that has been used to address problems as varied as food safety and toxic air pollution. In this article, I connect insights from research on management-based regulation to the international governance of climate change. Unfortunately, management-based regulation’s track-record at the domestic level gives little reason to expect that the Paris Agreement will lead to major long-term behavioral change needed to reduce greenhouse gas emissions. Although a management-based regulatory strategy may have been the best option available for securing a widespread global climate agreement, this strategy seems to offer little assurance of forward momentum on climate policy due to an inherent paradox created by the Agreement’s management-based design: global progress will depend on domestic politics. Especially given the rise of nationalistic populism around the world, the Paris Agreement will succeed only if political efforts within individual countries push back the threat to global cooperation posed by populism and convince domestic leaders to support serious climate action

Rethinking the State-Local Relationship: Corrections

Examines issues for shifting correctional responsibilities for lower-level felons from the state to counties, including funding, jail time and early release, alternative sanctions, post-release community supervision, and coordination of social services

Accelerated Technological Progress - An Explanation for Wage Dispersion and a Possible Solution to the Productivity Paradox

Due to scarcity considerations an increase in the supply of college graduates should reduce the premium for this kind of qualification. Therefore it seems quite contradictory that a tremendous educational expansion in the USA is accompanied by rising wage dispersion (overall and between educational groups). A second seemingly paradox development, which occured simultaneously, is the reduction of the total factor productivity during the emergence of the computerage - the so called productivity paradox. This contribution offers a simple unified solution to both of these puzzles and explains the educational expansion by assuming accelerated technological progress: An increase in the speed of technological progress raises the economic value of prospective periods and therefore works in favor of timeconsuming higher qualifications. The resulting educational expansion firstly goes along with a composition effect which leads to wage dispersion. Secondly the additional absence from the labor market of some more able individuals, due to the longer qualification, as well as an increasing share of individuals who choose a less productive qualification may lead to a transitory slowdown of the productivity growth rate.Wage Dispersion; Productivity Paradox; Inequality; Distribution; Technological Progress; Technological Change; SBTC; Educational Expansion; Total Factor Productivity; Educational Signaling; Real Wage LossesLohnspreizung; Produktivitätsparadox; Ungleichheit; Verteilung; Technologischer Fortschritt; Technologischer Wandel; SBTC; Bildungsexpansion; Totale Faktorproduktivität; Bildungssignale; reale Lohnsenkung

Unintended Detrimental Effects of Environmental Policy: The Green Paradox and Beyond

Well-intended policies aimed at reducing greenhouse gas emissions may have unintended undesirable consequences. Recently, a large literature has emerged showing under what conditions this so-called ‘Green Paradox’ may occur. We review this literature and identify the key mechanisms behind these paradoxical policy outcomes and highlight avenues for future research.climate policy, green paradox, non-renewable resources, scarcity, carbon tax, announcement effects, implementation lag, carbon leakage, backstop technology

Cutting Costs of Catching Carbon - Intertemporal Effects under Imperfect Climate Policy

We use a two-period model to investigate intertemporal effects of cost reductions in climate change mitigation technologies for the power sector. With imperfect climate policies, cost reductions related to carbon capture and storage (CCS) may be more desirable than com-parable cost reductions related to renewable energy. The finding rests on the incentives fossil resource owners face. With regulations of emissions only in the future, cheaper renewables speed up extraction (the ‘green paradox’), whereas CCS cost reductions make fossil resources more attractive for future use and lead to postponement of extraction.climate change, exhaustible resources, carbon capture and storage, renewable energy, green paradox

If Supply-Oriented Drug Policy is Broken, Can Harm Reduction Help Fix It?—Melding Disciplines and Methods to Advance International Drug Control Policy

Critics of the international drug control regime contend that supply-oriented policy interventions are not just ineffective, but they also produce unintended adverse consequences. Research suggests their claims have merit. Lasting local reductions in opium production are possible, albeit rare; but, unless global demand shrinks, production will shift elsewhere, with little or no effect on the aggregate supply of heroin and, potentially, at some expense to exiting and newly emerging suppliers. The net consequences of the international drug control regime and related national policies are as yet unknown. In this paper, we consider whether “harm reduction,” a subject of intense debate in the demand-oriented drug policy community, can provide a unifying foundation for supply-oriented drug policy, one capable of speaking more directly to policy goals. Despite substantial conceptual and technical challenges, we find that harm reduction can provide a basis for assessing the net consequences of supply-oriented drug policy, choosing more rigorously among policy options, and identifying new policy options. In addition, we outline a practical path forward for assessing harms and policy options.