Abstract:
Various states, among these, most of the European Union members, intervene into markets promoting their agribusiness sectors, although these sectors hold comparative cost disadvantages in the production of agricultural commodities. In contrast, other states such as Argentina which hold comparative cost advantages, discriminate agricultural goods e.g. by raising taxes or imposing export restrictions.
Taking on a perspective of economic rationality does not explain the two policies named above. Why then do states implement regulation if it harms their economy? Moreover, what results from state intervention which supports weak sectors or discriminates competitive ones, respectively?
Explaining these economic irrationalities, the study falls back upon two approaches from New Political Economy: Mancur Olson's Collective Action and Gary Becker's Interest Group Competition model. Both theories verify the operationalized hypotheses: (a) The smaller the respective agribusiness sector, the better interest groups mobilize and impose their concerns. (b) The lower the competition among interest groups or the higher the concentration of potential members in one single group, the higher their capacity to mobilize.
On the basis of this theoretical background, the study draws from the six clusters representing the data from 56 states' agribusiness sectors six case studies (Argentina, Indonesia, Mexico, New Zealand, South Korea and the U.S.), which are analyzed in detail. The theoretically postulated importance of interest groups' internal characteristics is verified empirically.
The findings yield policy advice for political actors (policy-makers and interest groups), further, they provide recommendations according the clusters: on the one hand, for economically rational regulation; on the other hand, for effective assertion of the different interests.