Is government efficient? An illustration from U.S. agricultural policy

The responsibility for the content lies solely with the author(s). Comments and critique by readers of this series are highly appreciated. Summary Agricultural programs are often criticized as being expensive and wasteful. However, spurred by the ideas of Nobel Prize winner Gary BECKER many studies in agricultural policy have implicitly assumed or tried to test whether, given the political constraint it faces, government is as efficient as it possibly can be. Given the importance of this Efficient Redistribution Hypothesis (ERH) in the prevailing agricultural economics literature, proper understanding of this hypothesis and how it might be tested are important. This paper illustrates the meaning and ramifications of the ERH. We critique one of the two methods commonly used to examine empirically the validity of the ERH, and we illustrate our critique with an empirical example from U.S. agricultural policy. illustrieren unsere Kritik anhand der Agrarpolitik der USA.