Umeå Economic Studies, Department of Economics, Umeå University
No 719:
Essays on Agricultural and Environmental Policy
Thomas Jonsson ()
Abstract: This thesis consists of a summary and four papers. The
first two papers address political economy and industrial organization
aspects of agricultural policy, and the last two international aspects of
environmental policy. Paper [1] explains Common Agricultural Policy (CAP)
subsidies to farmers by the influence of farmer interest-groups with an
EU-wide membership. The analysis is based on panel-data for fifteen
commodities over the period 1986-2003. Because the CAP is set as an overall
EU policy, effective lobbying presents a collective action problem to the
farmers of the EU as a whole. Indicators of lobbying, which are based on
this perception, are found to explain part of the variation in agricultural
support. In Paper [II], the Bresnahan-Lau framework is used to analyze
whether policy reforms, i.e. the two-price system (an input quota,
1986-1991) and a general deregulation of dairy policy (1991-1994) had any
market power effects on the Swedish butter market. The results show that
the null hypothesis of no market power cannot be rejected, for any of the
specific policy reforms, at any reasonable significance level. Paper [III]
concerns the welfare consequences of environmental policy cooperation. It
is assumed that countries finance their public expenditures by using
distortionary taxes, and that they differ with respect to competition in
the labor market. It is shown how the welfare effect of an increase in the
expenditures on abatement depends on changes in environmental damage,
employment and work hours. The welfare effect is also related to the
strategic interaction among the countries in the prereform equilibrium. In
Paper [IV] environmental policy in an economic federation, where each
national government faces a mixed tax problem, is addressed. It is assumed
that the federal government sets emission targets, which are implemented at
the national level. It is also assumed that the economic federation is
decentralized. The results highlight a strategic role of income and
commodity taxation, i.e. each country uses its policy instruments, at least
in part, to influence the emission target.
Keywords: agricultural policy; political economy; lobbying; cooperatives; market power; policy cooperation; distortionary taxes; labor market; Nash game; Stackelberg game; income and commodity taxation; economic federation; environmental policy; (follow links to similar papers)
JEL-Codes: D62; H21; H41; H43; H70; J51; J60; L22; L51; L66; Q11; Q18; (follow links to similar papers)
116 pages, November 16, 2007
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