POLITICAL FORCES AS A SUBSTITUTE FOR THE LAND MARKET

Land Economics/Use, Political Economy,

A CRITIQUE OF FEDERAL AGRICULTURAL PROGRAMS

Political Economy,

AGRICULTURAL POLICY: It Is Not Necessarily The Best of All Possible Worlds

The conventional view that economists play an important role in the public policy process is contrasted with "Chicago political economy." This strand of the Chicago School of Economics argues that government programs that survive in the political process are superior to available alternatives. In contrast, it is shown here that a farm program may persist not because it is broadly beneficial but rather because information and incentive problems in the political process lead to perverse results. The conclusion is that agricultural economists can make an important contribution to public policy

REAL PROPERTY TAXES AND FARM REAL ESTATE VALUES IN NORTH CAROLINA

Use value taxation for farm real estate and proposals to reduce the use of property taxes in financing local schools have received widespread attention throughout the United States in recent years. This report presents the results of a study designed to provide information necessary to determine how these (or other) proposals to reduce property taxes are likely to affect owners of farm real estate. A brief description is first presented of property taxes as they are administered in North Carolina. A model is then formulated to determine the extent to which changes in property taxes are capitalized into farm real estate values. The average value per acre of farm real estate on a county basis in North Carolina is regressed on the tax rate and four other categories of explanatory variables relating to agricultural productivity of land, farm size, urban influence, and recreational demand. The estimated relationship explained about three-fourths of the variation in farm real estate values. Al 1 explanatory variables had the hypothesized sign. The results indicate that property tax differentials are largely capitalized into real estate values. There are two important implications. First, a capital gain will accrue to the owner of real estate whose value is enhanced as a result of a reduction in the rate of taxation on real property. Second, the decrease in property taxes wi 11 be less than the decrease in the tax rate. The estimated relationship was used to analyze (1) the effects of a decrease in property taxes for farmers versus other property owners, (2) the effect of substituting state taxes for local property taxes, and (3) the potential effect of 1973 legislation providing for present use value taxation for farm real estate in North Carolina

A Public Choice Perspective on Agricultural Policy Reform: Implications of the New Zealand Experience

A public choice framework is used to interpret and explore the implications of the dramatic New Zealand economic reforms initiated in 1984. The New Zealand deregulation experience holds lessons for other countries attempting to limit rent seeking and rationalize farm policies. Economic analyses of protectionist policies helped to change public opinion, an important precursor to policy reform. The reform of farm policies was made easier because other sectors were simultaneously restructured. The New Zealand deregulation experience emphasizes the importance of the institutional framework for real world political processes and suggests that constitutional issues warrant more attention in public policy analysis. Copyright 1996, Oxford University Press.