Explaining Inefficient Policy Instruments

Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,

On the regulation of unobserved emissions

Regulation of nonpoint source pollution often relies in one way or another on policy instruments based on ambient indicators. For well-known reasons, enforcement of ambient-based policies is, at best, limited. If no individual choices or actions are observed, than ambient-based regulation might be the only feasible approach. Often, some relevant individual indicators, such as output or certain inputs, are observable. For such cases, we offer a regulation mechanism that does away with ambient indicators. The mechanism implements the optimal output-abatement-emission allocation and gives rise to the full information outcome when the social cost of transfers is nil. Special attention is given to the regulation of (unobserved) abatement.Nonpoint source pollution, abatement, asymmetric information, regulation mechanism, implementation., Environmental Economics and Policy,

BIOFUELS AND LEAKAGES IN THE FUEL MARKET

Leakage in the fuel market differs, depending on whether ethanol production is determined by a tax credit or consumption mandate. Two components of market leakage are distinguished: domestic and international. Leakage with both a tax credit and a consumption mandate depends on market elasticities and consumption/production shares, with the former having a bigger impact. Leakage is also more sensitive to changes in market supply and demand elasticities in the country not introducing biofuels. Although positive with a tax credit, market leakage can be negative with a consumption mandate, meaning that one gallon of ethanol can replace more than a gallon of gasoline. We also show that being a small country biofuels producer does not necessarily mean that leakage for this country is 100 percent. Our numerical estimates show that one gallon of ethanol replaces approximately 0.2-0.3 gallons of gasoline in the U.S.Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy,

An Econometric Model of the European Economic Community's Wheat Sector

Crop Production/Industries,

Agricultural Policies and the GATT: Reconciling Protection, Support and Distortion

This paper analyzes the relationship between the theory of protection, farm income support and international trade distortion. To parallel those of protection, a measure of distortion is derived which compares trade volumes under support policies with those which would occur under multilateral free trade. Estimates are made of these measures for the European Community and the United States for a selection of commodities. The relationship between measures of protection and economic efficiency is also highlighted. The conclusion is that present measures of protection such as the Producer Subsidy Equivalent are confusing as measures of either trade distortion or income support. Some implications are drawn for the GAIT negotiations on agriculture and for the design of domestic policies which minimize trade distortion.Agricultural and Food Policy, International Relations/Trade,

ISSUES IN THE ADMINISTRATION OF TARIFF-RATE IMPORT QUOTAS IN THE AGREEMENT ON AGRICULTURE IN THE WTO: AN INTRODUCTION

International Relations/Trade,

DISENTANGLING THE PRODUCTION AND EXPORT CONSEQUENCES OF DIRECT FARM INCOME PAYMENTS

This paper formalizes the production and export consequences of direct farm payments. Taxpayer financed direct payments distort exit and production incentives, while consumer financed subsidies also imply that the risks of domestic and export production differ. Welfare decompostion and empirical calibration illustrate the potential for import barriers to cross-subsidize exports.Agricultural and Food Policy, International Relations/Trade,

THE IMPACTS OF EXPORT SUBSIDY REDUCTION COMMITMENTS IN THE AGREEMENT ON AGRICULTURE

The effectiveness of limits and reductions in both export volumes subsidized and value of export subsidies in agriculture is evaluated. A perspective on consumer versus producer financed export subsidies is given. We analyze factors affecting the effectiveness of volume versus value commitments. Statistical analysis of EU export subsidies analyzes the mean and variance of bindings.Agricultural and Food Policy, International Relations/Trade,

THE POLITICS OF UNDERINVESTMENT IN AGRICULTURAL RESEARCH

This paper develops a political economy framework that determines the factors causing underinvestment in public research expenditures. Governments are unable to fully compensate for unequal income distribution effects of research because of either their inability to make credible commitments or of deadweight costs associated with compensation.Political Economy, Research and Development/Tech Change/Emerging Technologies,

THE CANADA- U.S. TRADE DISPUTES ON DAIRY AND POULTRY: A GOOD EXAMPLE

International Relations/Trade,