Campaign Contributions and Agricultural Subsidies

In: Economics & politics, Band 13, Heft 3, S. 257-279

Abstract

This article examines the influence of campaign contributions on agricultural subsidies. Empirical results revealed that rent-seeking works, ie, contributions, influence agricultural subsidies in the manner they best serve contributors' economic interests. Eliminating campaign contributions would significantly decrease agricultural subsidies, hurt farm groups, benefit consumers & taxpayers, & increase social welfare by approximately $5.5 billion. Although contributions are not the only determinants of agricultural subsidies, investment returns to farm political action committee contributors are quite high ($1 in contributions brings about $2,000 in policy transfers). In fact, the results are in sharp contrast to the "truthful contributions" assumption of the Grossman-Helpman model. 3 Tables, 1 Appendix, 33 References. Adapted from the source document.