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Measuring the benefists of international agricultural economics research

By: Schimmelpfenning, D.E | Centro Internacional de Mejoramiento de Maiz y Trigo (CIMMYT), Mexico DF (Mexico) | International Conference on Impacts of Agricultural Research and Development San José (Costa Rica) 4-7 Feb 2002.
Contributor(s): Norton, G.W [coaut.] | Watson, D.J [ed.].
Material type: materialTypeLabelBookAnalytics: Show analyticsPublisher: Mexico, DF (Mexico) CIMMYT : 2003Description: p. 31.ISBN: 970-648-076-5.Subject(s): Agricultural economics | Economic policies | Economic sociology | Quantitative analysis | Socioeconomic development | CIMMYT | Research institutions AGROVOC | Agricultural research AGROVOCDDC classification: 338.91 Summary: Impact assessments of agricultural social science research (SSR), including agricultural economics research (AER), have made relatively little difference, probably because there have been few SSR assessments. The reason for so few assessments is that the output of SSR is difficult to measure, is aimed at diverse objectives, and is often embedded in recommendations, institutional changes, or quantitative methods. Causality between AER and specific decisions or institutional changes is difficult to establish because the research information is often just one of many inputs into a political process; and political decisions may influence AER, reversing the causality. Quantitative evaluation of SSR (or AER) is challenging, but can potentially be achieved through casting the problem in a political-economic framework, and addressing the causality issue by using a method that captures the role of SSR in helping decision makers update their prior probabilities for specific events. The economic value of AER arises primarily from its effect on economic efficiency through reductions in uncertainty about the optimal (or a preferred) way to allocate resources, or the optimal (preferred) design of a policy or institution. Therefore a framework for evaluating the benefits of AER can be built that explicitly models (a) the impacts of AER on policymakers and private decision-makers' subjective beliefs about the consequences of actions, (b) the economic efficiency or welfare effects of those actions, and (c) the political-economic interactions between policymakers and interest groups that underpin policy decisions. The model builds on earlier work by Feeney and Hillman, and considers how firms and consumers, who are also investors, influence government policies through their lobbying efforts in the presence of AER. Strategic interactions between different governments in policy formation are captured in a non-cooperative game through the ability of each government to use subsidies to indirectly shift profits from foreign to domestic firms in imperfectly competitive markets at home. Risk-averse investors, who can share in the profits of domestic or foreign firms and can act as lobbyists at home, are impacted by the policy outcome through the return on their portfolio holdings. General scientific and other non-SSR reduces uncertainty in productivity and firm profits, subsequently shared with investors. SSR messages reduce uncertainty in political-economic decision- making, but may not necessarily override the will of lobby groups, if the influence of those groups is greater than the reduction in uncertainty. The framework is empirically tested by implementing a Bayesian decision theory approach to updating the uncertainty in the model, and is applied to AER (research on producer and consumer subsidy equivalents) that supported international strategic interactions during the Uruguay Round and other operations of the World Trade Organization. Its potential role in evaluating research on United Nations agreements for the international preservation of biodiversity and the Kyoto Protocol for the control of greenhouse gas emissions is briefly addressed.Collection: CIMMYT Publications Collection
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Conference proceedings CIMMYT Knowledge Center: John Woolston Library

Lic. Jose Juan Caballero Flores

 

CIMMYT Publications Collection 338.91 WAT (Browse shelf) 1 Available L632147
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Abstract only

Impact assessments of agricultural social science research (SSR), including agricultural economics research (AER), have made relatively little difference, probably because there have been few SSR assessments. The reason for so few assessments is that the output of SSR is difficult to measure, is aimed at diverse objectives, and is often embedded in recommendations, institutional changes, or quantitative methods. Causality between AER and specific decisions or institutional changes is difficult to establish because the research information is often just one of many inputs into a political process; and political decisions may influence AER, reversing the causality. Quantitative evaluation of SSR (or AER) is challenging, but can potentially be achieved through casting the problem in a political-economic framework, and addressing the causality issue by using a method that captures the role of SSR in helping decision makers update their prior probabilities for specific events. The economic value of AER arises primarily from its effect on economic efficiency through reductions in uncertainty about the optimal (or a preferred) way to allocate resources, or the optimal (preferred) design of a policy or institution. Therefore a framework for evaluating the benefits of AER can be built that explicitly models (a) the impacts of AER on policymakers and private decision-makers' subjective beliefs about the consequences of actions, (b) the economic efficiency or welfare effects of those actions, and (c) the political-economic interactions between policymakers and interest groups that underpin policy decisions. The model builds on earlier work by Feeney and Hillman, and considers how firms and consumers, who are also investors, influence government policies through their lobbying efforts in the presence of AER. Strategic interactions between different governments in policy formation are captured in a non-cooperative game through the ability of each government to use subsidies to indirectly shift profits from foreign to domestic firms in imperfectly competitive markets at home. Risk-averse investors, who can share in the profits of domestic or foreign firms and can act as lobbyists at home, are impacted by the policy outcome through the return on their portfolio holdings. General scientific and other non-SSR reduces uncertainty in productivity and firm profits, subsequently shared with investors. SSR messages reduce uncertainty in political-economic decision- making, but may not necessarily override the will of lobby groups, if the influence of those groups is greater than the reduction in uncertainty. The framework is empirically tested by implementing a Bayesian decision theory approach to updating the uncertainty in the model, and is applied to AER (research on producer and consumer subsidy equivalents) that supported international strategic interactions during the Uruguay Round and other operations of the World Trade Organization. Its potential role in evaluating research on United Nations agreements for the international preservation of biodiversity and the Kyoto Protocol for the control of greenhouse gas emissions is briefly addressed.

English

0310|R01CIMPU|AGRIS 0301|AL-Economics Program

Juan Carlos Mendieta

CIMMYT Publications Collection

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