The Common Agricultural Policy (CAP) of the European Community (EC) is a complex institutional structure with major effects on world agriculture. This study analyzes the CAP from a public choice perspective as a case of induced institutional innovation. The demand for change is analyzed as a function of a newly enlarged Community. Time-consuming decisions, unequal distribution of net benefits, increasing budget expenditures, and rising pressures to “renationalize” farm subsidies drive the demand for change. Alternative institutional arrangements respond to these demands, which reflect preferences for fairness and equity as well as improved efficiency in the CAP.
Bibliographical noteFunding Information:
Support for this study was provided by the Minnesota Agricultural Experiment Station, a Grant-in-Aid from the Graduate School of the University of Minnesota, a travel grant from the United Kingdom Fund of the Hubert H. Humphrey Institute of Public Affairs, and an International Affairs Fellowship from the Council on Foreign Relations. Research was conducted as part of the North American Granary project, sponsored by the Center for International Food and Agricultural Policy in the Department of Agricultural and Applied Economics, with primary funding from the Northwest Area Foundation, St. Paul, Minnesota.
- Decision rules
- European Community
- Institutional innovation