The political economy of food pricing: An extended empirical test of the interest group approach

Several recent studies have documented the magnitude and impact of distortions in food pricing. However, little attention has been paid to the nature of the political agendas that determine the levels of direct and indirect protection granted to producers and consumers. This paper offers evidence that, regardless of the degree of economic development, the level of political pressure wielded by interest groups in food markets, and hence the level of protection they receive, is an inverse function of the relative size of their constituencies. The results recommend the application of collective action concepts to the understanding of agricultural policies in countries which are at different stages of development.