| This dissertation uses the political preference function approach to explain the Korean rice policy over last 25 years and applied it to the agricultural policy reforms. By relaxing the basic assumption of the traditional model that all interest groups have equal welfare weights, this study explores and develops a framework for explaining and predicting the policy choice.;First, the political preference function approach has been employed to find the political (or welfare) weights of interest groups in redistributing income through the government policy instruments. The estimated political weights indicate that the Korean rice policymaker has shown a trend of favoring rice producers more than the other interest groups. In the Korean Rice sector, the political or welfare weights are particularly high for producers, low for taxpayers and lowest for consumers.;Second, the welfare weights were applied to the welfare incidence of five alternative rice policies. Five alternative policies that a small importing country might choose to achieve a given producer income goal, are analyzed and compared with respect to their economic transfer efficiency and political feasibility. The policy instruments analyzed in this section cover the traditional government farm programs: (1) Lump-sum transfers, (2) Deficiency payment, (3) Consumer tax, (4) Market price support, and (5) Two-tier pricing system. The results suggests that, in terms of economic efficiency, a pure lump-sump transfer is the most efficient policy as indicated in most previous studies using the conventional efficiency criterion. However, in terms of the political preference function with different welfare weights, it could be a sub-optimal policy. In the current political-economic situation of Korean rice sector, the larger the proportional increase in domestic support to farmers, the smaller is the economic efficiency in terms of the change in deadweight loss, the greater is the political feasibility in terms of the change in value of political preference function.;Finally, this study analyzes the roles that political preferences have on optimal storage policy. Optimal storage rules differ when welfare weight is considered in the model compared to when it is not included. The differences in optimal storage rules crucially depend on not only the market parameters but also the magnitudes of welfare weights on interest group. Under the current political economic situation of the Korean rice market, the optimal storage levels is larger than those of maximizing a utilitarian social welfare function over all the ranges of market supply. For a given supply level, the optimal carryover will tend to be larger if demand is more inelastic or the producer's welfare weight is relatively greater than that of other interest groups. |
