A model is developed to explain observed patterns of policy intervention in agriculture. We analyze the interaction between political support‐seeking politicians and support‐supplying citizens. Society consists of a rural and urban group. We determine the effects on transfers of relative group size, disparities in income endowments between groups, and the deadweight loss of redistribution. The framework advanced is an alternative to that of the interest group model and is used to explain, for example, why the export sectors in developing countries are taxed more and why the United Kingdom is less adamant for higher price supports than Germany.
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Gorter et al. (1991) studied this question.
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