The level and composition of agricultural support policies : their impact on the performance of the agriculture sector and an exploration of their causes
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2021
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Abstract
Historically governments have intervened in the agricultural sector, either through the regulation of the prices or public expenditures. The objective of this study is to analyze the effects of government expenditures, its composition on agricultural income and productivity, and its institutional and political causes. The thesis is organized in four chapters and two annexes. In the first Chapter we present the conceptual and methodological framework. In the second, we present a descriptive analysis of the trends and current situation of the level and composition of agricultural support policies, using data from 35 countries from 1986 to 2018. In the third and four Chapters we present the empirical analysis, using several approaches to model estimation and the 35 country panel data. The results confirm previous studies regarding the positive effect on farm sector performance of the level of public spending, and, more importantly, the negative effect of spending directed towards private goods. In terms of estimation strategies, results also show that measuring agricultural productivity by sectoral value added per farm worker, in contrast to value added per rural inhabitant, leads to more robust estimation with greater statistical significance. The results also indicate that explanatory variables related to political institutions explain the level and composition of government spending. We found that political institutions with a proportional election rule and presidential system tend to have greater overall support for the agricultural sector and greater spending on private subsidies. Also, economic development is associated with greater public agricultural spending.
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Tesis (Doctor en Ciencias de la Agricultura)--Pontificia Universidad Católica de Chile, 2021