de Gorter, Harry2017-09-112017-09-112008-08https://hdl.handle.net/10986/28275The purpose of this paper is to provide an overview of the literature on the political economy of policy instrument choice and relate it to the experiences in agriculture. The paper is therefore organized as follows. The second section provides a ranking of policies as to their transfer efficiency and determines the standard of evaluation, given that no policy is perfect in achieving its goals. The third section explores why political competition does not ensure that an efficient policy instrument is chosen. The following two sections explain the two key theories: enforcement and commitment problems in section four, and information and agency problems in section five. Section six presents the important Grossman-Helpman model of inefficient policy choice that falls outside these two general theories. Section seven describes how policy instrument choice in agriculture is often a discrete outcome in response to a crisis and therefore becomes path dependent, resulting in a status quo bias. Section eight describes how trade agreements can affect policy instrument choice. The final section gives some guidance as to the outstanding issues.en-USCC BY 3.0 IGOADJUSTMENT ASSISTANCEAGENCY PROBLEMSAGRICULTUREALLOCATIONASSET VALUESASYMMETRIC INFORMATIONAVERAGE COSTSBANKSBARGAININGBARGAINING POWERBONDBUDGET DEFICITBUREAUCRACYCASH PAYMENTSCOLLECTIVE ACTIONCOMMODITIESCOMMODITYCOMMODITY PRICECOMMODITY PRICESCOMPARATIVE ECONOMICSCONSUMERSCORRUPTIONDEMOCRACIESDEPRESSIONDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDIRECT PAYMENTSDISCOUNT RATEDISCRETIONDIVIDENDDOMESTIC PRICEDUMPINGDYNAMIC ANALYSISECONOMIC ANALYSISECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC FORCESECONOMIC GROWTHECONOMIC HISTORYECONOMIC MODELSECONOMIC REFORMSECONOMIC THEORYECONOMICSECONOMICS LITERATUREEFFICIENT OUTCOMESENFORCEMENT OF CONTRACTSEQUILIBRIUM ANALYSISEXCHANGE RATEEXPORTSFOOD PRICEFOOD PRICESFREE MARKETSFREE TRADEGAME THEORYGDPGENERAL EQUILIBRIUMGOVERNMENT ACTIONSGOVERNMENT INTERVENTIONHARMONIZATIONIMPERFECT INFORMATIONIMPORT BARRIERSIMPORT QUOTASINCOMEINCOME DISTRIBUTIONINCOME EFFECTINCOME TAXINCOME TAXESINCOMESINCREASING RETURNSINCUMBENTINEFFICIENCYINELASTIC DEMANDINFORMATION ASYMMETRIESINITIATIVEINSTITUTIONAL ECONOMICSINSURANCEINTEREST GROUPINTERNATIONAL LAWINTERNATIONAL ORGANIZATIONINTERNATIONAL TRADELABOR MARKETSLABOR SUPPLYLEADERSHIPLEGITIMACYLOBBYINGLUMP SUM TRANSFERSMARKET CONDITIONSMARKET DISTORTIONSMARKET FAILUREMARKET FAILURESMARKET PRICEMATHEMATICAL ECONOMICSMONOPOLYMOTIVATIONPATRONAGEPENALTIESPOLICESPOLITICAL DEMOCRACYPOLITICAL ECONOMYPOLITICAL PARTYPOLITICAL POWERPOLITICAL PROCESSPOLITICAL REGIMEPOLITICAL SCIENCEPOLITICAL SYSTEMPOLITICIANPOLITICIANSPOLLUTIONPREFERENCE FUNCTIONSPRICE DISCRIMINATIONPRICE DISTORTIONPRICE DISTORTIONSPRICE POLICIESPRIVATE SECTORPRODUCTION COSTSPRODUCTIVITYPROPERTY RIGHTSPUBLIC GOODSPUBLIC POLICIESREAL WAGESREMEDYRENT SEEKINGREPUTATIONSAFETYSAFETY NETSSAVINGSSETTLEMENT PROCEDURESSMALL COUNTRIESSOCIAL BENEFITSSOCIAL COSTSSTRUCTURAL CHANGESUPPLY CURVESUSTAINABLE DEVELOPMENTTAXTAX REVENUESTAXATIONTOTAL OUTPUTTRADE BARRIERSTRADE LIBERALIZATIONTRADE NEGOTIATIONSTRADE POLICIESTRADE POLICYTRADE-OFFTRADESTRANSACTION COSTSTRANSACTIONS COSTSTRANSPARENCYURUGUAY ROUNDVOTERSWAGE TAXESWAGESWEALTHWELFARE ECONOMICSWTOWorking PaperWorld Bank10.1596/28275