This paper describes agricultural policychoices and tests some predictions of political economytheories. It begins with three broad stylized facts:governments tend to tax agriculture in poorer countries, andsubsidize it in richer ones, tax both imports and exportsmore than nontradables and tax more and subsidize less wherethere is more land per capita. We test a variety ofpolitical economy explanations, finding results consistentwith hypothesized effects of rural and urbanconstituents' rational ignorance about small per personeffects, governance institutions' control of rentseeking by political leaders, governments' revenuemotive for taxation, and the role of time consistency inpolicy making. We also find that larger groups obtain morefavorable policies, suggesting that positive group sizeeffects outweigh any negative influence from free ridership,and that demographically driven entry of new farmers isassociated with less favorable farm policies, suggesting thearrival of new farmers erodes policy rents and discouragespolitical activity by incumbents. Another new result is thatgovernments achieve very little price stabilization relativeto our benchmark estimates of undistorted prices, andgovernments in the poorest countries actually destabilizedomestic prices.
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