Explaining Inefficient Policy Instruments

The 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 r...

Full description

Bibliographic Details
Main Author:	de Gorter, Harry
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	ADJUSTMENT ASSISTANCE AGENCY PROBLEMS AGRICULTURE ALLOCATION ASSET VALUES ASYMMETRIC INFORMATION AVERAGE COSTS BANKS BARGAINING BARGAINING POWER BOND BUDGET DEFICIT BUREAUCRACY CASH PAYMENTS COLLECTIVE ACTION COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPARATIVE ECONOMICS CONSUMERS CORRUPTION DEMOCRACIES DEPRESSION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIRECT PAYMENTS DISCOUNT RATE DISCRETION DIVIDEND DOMESTIC PRICE DUMPING DYNAMIC ANALYSIS ECONOMIC ANALYSIS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC FORCES ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC MODELS ECONOMIC REFORMS ECONOMIC THEORY ECONOMICS ECONOMICS LITERATURE EFFICIENT OUTCOMES ENFORCEMENT OF CONTRACTS EQUILIBRIUM ANALYSIS EXCHANGE RATE EXPORTS FOOD PRICE FOOD PRICES FREE MARKETS FREE TRADE GAME THEORY GDP GENERAL EQUILIBRIUM GOVERNMENT ACTIONS GOVERNMENT INTERVENTION HARMONIZATION IMPERFECT INFORMATION IMPORT BARRIERS IMPORT QUOTAS INCOME INCOME DISTRIBUTION INCOME EFFECT INCOME TAX INCOME TAXES INCOMES INCREASING RETURNS INCUMBENT INEFFICIENCY INELASTIC DEMAND INFORMATION ASYMMETRIES INITIATIVE INSTITUTIONAL ECONOMICS INSURANCE INTEREST GROUP INTERNATIONAL LAW INTERNATIONAL ORGANIZATION INTERNATIONAL TRADE LABOR MARKETS LABOR SUPPLY LEADERSHIP LEGITIMACY LOBBYING LUMP SUM TRANSFERS MARKET CONDITIONS MARKET DISTORTIONS MARKET FAILURE MARKET FAILURES MARKET PRICE MATHEMATICAL ECONOMICS MONOPOLY MOTIVATION PATRONAGE PENALTIES POLICES POLITICAL DEMOCRACY POLITICAL ECONOMY POLITICAL PARTY POLITICAL POWER POLITICAL PROCESS POLITICAL REGIME POLITICAL SCIENCE POLITICAL SYSTEM POLITICIAN POLITICIANS POLLUTION PREFERENCE FUNCTIONS PRICE DISCRIMINATION PRICE DISTORTION PRICE DISTORTIONS PRICE POLICIES PRIVATE SECTOR PRODUCTION COSTS PRODUCTIVITY PROPERTY RIGHTS PUBLIC GOODS PUBLIC POLICIES REAL WAGES REMEDY RENT SEEKING REPUTATION SAFETY SAFETY NETS SAVINGS SETTLEMENT PROCEDURES SMALL COUNTRIES SOCIAL BENEFITS SOCIAL COSTS STRUCTURAL CHANGE SUPPLY CURVE SUSTAINABLE DEVELOPMENT TAX TAX REVENUES TAXATION TOTAL OUTPUT TRADE BARRIERS TRADE LIBERALIZATION TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE-OFF TRADES TRANSACTION COSTS TRANSACTIONS COSTS TRANSPARENCY URUGUAY ROUND VOTERS WAGE TAXES WAGES WEALTH WELFARE ECONOMICS WTO
Online Access:	http://documents.worldbank.org/curated/en/585151468329339087/Explaining-inefficient-policy-instruments http://hdl.handle.net/10986/28275

id	okr-10986-28275
recordtype	oai_dc
spelling	okr-10986-282752021-04-23T14:04:46Z Explaining Inefficient Policy Instruments de Gorter, Harry ADJUSTMENT ASSISTANCE AGENCY PROBLEMS AGRICULTURE ALLOCATION ASSET VALUES ASYMMETRIC INFORMATION AVERAGE COSTS BANKS BARGAINING BARGAINING POWER BOND BUDGET DEFICIT BUREAUCRACY CASH PAYMENTS COLLECTIVE ACTION COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPARATIVE ECONOMICS CONSUMERS CORRUPTION DEMOCRACIES DEPRESSION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIRECT PAYMENTS DISCOUNT RATE DISCRETION DIVIDEND DOMESTIC PRICE DUMPING DYNAMIC ANALYSIS ECONOMIC ANALYSIS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC FORCES ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC MODELS ECONOMIC REFORMS ECONOMIC THEORY ECONOMICS ECONOMICS LITERATURE EFFICIENT OUTCOMES ENFORCEMENT OF CONTRACTS EQUILIBRIUM ANALYSIS EXCHANGE RATE EXPORTS FOOD PRICE FOOD PRICES FREE MARKETS FREE TRADE GAME THEORY GDP GENERAL EQUILIBRIUM GOVERNMENT ACTIONS GOVERNMENT INTERVENTION HARMONIZATION IMPERFECT INFORMATION IMPORT BARRIERS IMPORT QUOTAS INCOME INCOME DISTRIBUTION INCOME EFFECT INCOME TAX INCOME TAXES INCOMES INCREASING RETURNS INCUMBENT INEFFICIENCY INELASTIC DEMAND INFORMATION ASYMMETRIES INITIATIVE INSTITUTIONAL ECONOMICS INSURANCE INTEREST GROUP INTERNATIONAL LAW INTERNATIONAL ORGANIZATION INTERNATIONAL TRADE LABOR MARKETS LABOR SUPPLY LEADERSHIP LEGITIMACY LOBBYING LUMP SUM TRANSFERS MARKET CONDITIONS MARKET DISTORTIONS MARKET FAILURE MARKET FAILURES MARKET PRICE MATHEMATICAL ECONOMICS MONOPOLY MOTIVATION PATRONAGE PENALTIES POLICES POLITICAL DEMOCRACY POLITICAL ECONOMY POLITICAL PARTY POLITICAL POWER POLITICAL PROCESS POLITICAL REGIME POLITICAL SCIENCE POLITICAL SYSTEM POLITICIAN POLITICIANS POLLUTION PREFERENCE FUNCTIONS PRICE DISCRIMINATION PRICE DISTORTION PRICE DISTORTIONS PRICE POLICIES PRIVATE SECTOR PRODUCTION COSTS PRODUCTIVITY PROPERTY RIGHTS PUBLIC GOODS PUBLIC POLICIES REAL WAGES REMEDY RENT SEEKING REPUTATION SAFETY SAFETY NETS SAVINGS SETTLEMENT PROCEDURES SMALL COUNTRIES SOCIAL BENEFITS SOCIAL COSTS STRUCTURAL CHANGE SUPPLY CURVE SUSTAINABLE DEVELOPMENT TAX TAX REVENUES TAXATION TOTAL OUTPUT TRADE BARRIERS TRADE LIBERALIZATION TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE-OFF TRADES TRANSACTION COSTS TRANSACTIONS COSTS TRANSPARENCY URUGUAY ROUND VOTERS WAGE TAXES WAGES WEALTH WELFARE ECONOMICS WTO The 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. 2017-09-11T14:50:09Z 2017-09-11T14:50:09Z 2008-08 Working Paper http://documents.worldbank.org/curated/en/585151468329339087/Explaining-inefficient-policy-instruments http://hdl.handle.net/10986/28275 English en_US Agricultural Distortions Working Paper;75 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ADJUSTMENT ASSISTANCE AGENCY PROBLEMS AGRICULTURE ALLOCATION ASSET VALUES ASYMMETRIC INFORMATION AVERAGE COSTS BANKS BARGAINING BARGAINING POWER BOND BUDGET DEFICIT BUREAUCRACY CASH PAYMENTS COLLECTIVE ACTION COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPARATIVE ECONOMICS CONSUMERS CORRUPTION DEMOCRACIES DEPRESSION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIRECT PAYMENTS DISCOUNT RATE DISCRETION DIVIDEND DOMESTIC PRICE DUMPING DYNAMIC ANALYSIS ECONOMIC ANALYSIS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC FORCES ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC MODELS ECONOMIC REFORMS ECONOMIC THEORY ECONOMICS ECONOMICS LITERATURE EFFICIENT OUTCOMES ENFORCEMENT OF CONTRACTS EQUILIBRIUM ANALYSIS EXCHANGE RATE EXPORTS FOOD PRICE FOOD PRICES FREE MARKETS FREE TRADE GAME THEORY GDP GENERAL EQUILIBRIUM GOVERNMENT ACTIONS GOVERNMENT INTERVENTION HARMONIZATION IMPERFECT INFORMATION IMPORT BARRIERS IMPORT QUOTAS INCOME INCOME DISTRIBUTION INCOME EFFECT INCOME TAX INCOME TAXES INCOMES INCREASING RETURNS INCUMBENT INEFFICIENCY INELASTIC DEMAND INFORMATION ASYMMETRIES INITIATIVE INSTITUTIONAL ECONOMICS INSURANCE INTEREST GROUP INTERNATIONAL LAW INTERNATIONAL ORGANIZATION INTERNATIONAL TRADE LABOR MARKETS LABOR SUPPLY LEADERSHIP LEGITIMACY LOBBYING LUMP SUM TRANSFERS MARKET CONDITIONS MARKET DISTORTIONS MARKET FAILURE MARKET FAILURES MARKET PRICE MATHEMATICAL ECONOMICS MONOPOLY MOTIVATION PATRONAGE PENALTIES POLICES POLITICAL DEMOCRACY POLITICAL ECONOMY POLITICAL PARTY POLITICAL POWER POLITICAL PROCESS POLITICAL REGIME POLITICAL SCIENCE POLITICAL SYSTEM POLITICIAN POLITICIANS POLLUTION PREFERENCE FUNCTIONS PRICE DISCRIMINATION PRICE DISTORTION PRICE DISTORTIONS PRICE POLICIES PRIVATE SECTOR PRODUCTION COSTS PRODUCTIVITY PROPERTY RIGHTS PUBLIC GOODS PUBLIC POLICIES REAL WAGES REMEDY RENT SEEKING REPUTATION SAFETY SAFETY NETS SAVINGS SETTLEMENT PROCEDURES SMALL COUNTRIES SOCIAL BENEFITS SOCIAL COSTS STRUCTURAL CHANGE SUPPLY CURVE SUSTAINABLE DEVELOPMENT TAX TAX REVENUES TAXATION TOTAL OUTPUT TRADE BARRIERS TRADE LIBERALIZATION TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE-OFF TRADES TRANSACTION COSTS TRANSACTIONS COSTS TRANSPARENCY URUGUAY ROUND VOTERS WAGE TAXES WAGES WEALTH WELFARE ECONOMICS WTO
spellingShingle	ADJUSTMENT ASSISTANCE AGENCY PROBLEMS AGRICULTURE ALLOCATION ASSET VALUES ASYMMETRIC INFORMATION AVERAGE COSTS BANKS BARGAINING BARGAINING POWER BOND BUDGET DEFICIT BUREAUCRACY CASH PAYMENTS COLLECTIVE ACTION COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPARATIVE ECONOMICS CONSUMERS CORRUPTION DEMOCRACIES DEPRESSION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIRECT PAYMENTS DISCOUNT RATE DISCRETION DIVIDEND DOMESTIC PRICE DUMPING DYNAMIC ANALYSIS ECONOMIC ANALYSIS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC FORCES ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC MODELS ECONOMIC REFORMS ECONOMIC THEORY ECONOMICS ECONOMICS LITERATURE EFFICIENT OUTCOMES ENFORCEMENT OF CONTRACTS EQUILIBRIUM ANALYSIS EXCHANGE RATE EXPORTS FOOD PRICE FOOD PRICES FREE MARKETS FREE TRADE GAME THEORY GDP GENERAL EQUILIBRIUM GOVERNMENT ACTIONS GOVERNMENT INTERVENTION HARMONIZATION IMPERFECT INFORMATION IMPORT BARRIERS IMPORT QUOTAS INCOME INCOME DISTRIBUTION INCOME EFFECT INCOME TAX INCOME TAXES INCOMES INCREASING RETURNS INCUMBENT INEFFICIENCY INELASTIC DEMAND INFORMATION ASYMMETRIES INITIATIVE INSTITUTIONAL ECONOMICS INSURANCE INTEREST GROUP INTERNATIONAL LAW INTERNATIONAL ORGANIZATION INTERNATIONAL TRADE LABOR MARKETS LABOR SUPPLY LEADERSHIP LEGITIMACY LOBBYING LUMP SUM TRANSFERS MARKET CONDITIONS MARKET DISTORTIONS MARKET FAILURE MARKET FAILURES MARKET PRICE MATHEMATICAL ECONOMICS MONOPOLY MOTIVATION PATRONAGE PENALTIES POLICES POLITICAL DEMOCRACY POLITICAL ECONOMY POLITICAL PARTY POLITICAL POWER POLITICAL PROCESS POLITICAL REGIME POLITICAL SCIENCE POLITICAL SYSTEM POLITICIAN POLITICIANS POLLUTION PREFERENCE FUNCTIONS PRICE DISCRIMINATION PRICE DISTORTION PRICE DISTORTIONS PRICE POLICIES PRIVATE SECTOR PRODUCTION COSTS PRODUCTIVITY PROPERTY RIGHTS PUBLIC GOODS PUBLIC POLICIES REAL WAGES REMEDY RENT SEEKING REPUTATION SAFETY SAFETY NETS SAVINGS SETTLEMENT PROCEDURES SMALL COUNTRIES SOCIAL BENEFITS SOCIAL COSTS STRUCTURAL CHANGE SUPPLY CURVE SUSTAINABLE DEVELOPMENT TAX TAX REVENUES TAXATION TOTAL OUTPUT TRADE BARRIERS TRADE LIBERALIZATION TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE-OFF TRADES TRANSACTION COSTS TRANSACTIONS COSTS TRANSPARENCY URUGUAY ROUND VOTERS WAGE TAXES WAGES WEALTH WELFARE ECONOMICS WTO de Gorter, Harry Explaining Inefficient Policy Instruments
relation	Agricultural Distortions Working Paper;75
description	The 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.
format	Working Paper
author	de Gorter, Harry
author_facet	de Gorter, Harry
author_sort	de Gorter, Harry
title	Explaining Inefficient Policy Instruments
title_short	Explaining Inefficient Policy Instruments
title_full	Explaining Inefficient Policy Instruments
title_fullStr	Explaining Inefficient Policy Instruments
title_full_unstemmed	Explaining Inefficient Policy Instruments
title_sort	explaining inefficient policy instruments
publisher	World Bank, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/585151468329339087/Explaining-inefficient-policy-instruments http://hdl.handle.net/10986/28275
_version_	1764466073163268096

Explaining Inefficient Policy Instruments

Similar Items