"Political Institutions and Agricultural Trade Interventions in Africa" Co-authored by Professor Block
Date: December 9, 2010
In the absence of electoral competition to affect policy, agents must lobby. Policy is then the result of elite choice, made in response to interest group competition.
Given the distribution of population and economic activity in poor nations—such as those in Africa—farmers should be relatively disadvantaged in efforts to influence public policies, by comparison with city dwellers and urban industries. That this is so helps to account for an important irony: that in countries where farmers are numerous and agriculture represents the single largest industry, governments choose policies that constitute a tax on farmers.
The reasoning that resolves this paradox arises from the logic of collective action (Olson 1971; Bates 1981). When rural dwellers constitute a large percentage of the national population, agricultural production tends to lie in the hands of a large number of small producers dispersed throughout the countryside. As no single producer can influence government policy, and as organizing so large and diverse a population is costly, the individuals’ incentive to lobby is weak. In countries with large agricultural populations, agriculture should therefore constitute an ineffective interest group. In addition, in the early stages of structural change, in most countries, a few large firms dominate in each industry, typically as the result of government protection, the tax treatment of capital, and the size of the market. Compared with rural producers, then, urban interests would experience strong incentives to lobby and low costs when doing so.
Consumers should therefore hold a relative advantage as lobbyists in countries with large agricultural populations. And we therefore expect governments in countries with large agricultural sectors to adopt relatively adverse policies toward farming. However, the very factors—size and dispersal—that render farmers weak lobbyists can render them powerful in electoral settings (Bates 2007). Where representation is achieved through electoral channels and rural dwellers constitute a large segment of the voting population, politicians encounter powerful incentives to cater to the interests of farmers. In environments with electoral competition, politicians encounter electoral incentives that would impel them to resist the political pressures emanating from urban consumers.