Political economy determinants of agricultural protection levels in EU member states: An empirical investigation

This study uses a political economy approach to explain differences in agricultural protection levels among EU countries during the period 1975-1989. Panel data regression analysis is conducted for two different measures of agricultural protection. The paper shows that agricultural support increases when market conditions are against agriculture (countercyclicity), and in countries with a comparative disadvantage in agriculture. The number of farms strongly conditions the protection patterns across countries, showing that small countries and small agricultural sectors are more likely to gain CAP transfers. The results support the hypothesis that national agricultural policies have been used by member states as an additional compensatory mechanism to the CAP. Finally, the use of a protection index that removes the assumption of zero substitutability among inputs and outputs increases the explanatory power of the model.