Reducing distortions to agricultural incentives: Progress, pitfalls, and prospects

Abstract

For the past two decades, a number of developing country governments have reduced their sectoral and trade policy distortions. Today, many argue that high-income countries should reduce their remaining protectionism that harms developing country exports of farm products. Since the process of reform is far from complete, pressures to open up markets will continue multilaterally, preferentially and unilaterally while groups with vested interests in current poilicies will continue to counter-lobby to retain and increase sectoral assistance. Better empirical research on the extent, causes and effects of policy is needed to encourage developing countries to further reform their sectoral and trade policies. Focus should be on the changing extent of distortions, the effects of current distortions and reform alternatives and the political economy forces behind distortionary policies.