| Agricultural policies are likely to respond to political economic interactions rather than to the necessity for correcting market failures. Political economic approaches have gone beyond the horizons of traditional market analyses to explore why and how agricultural policies have evolved to their present forms. Meanwhile, in the formal modeling for policy analysis, it has gradually been recognized that the political economic forces associated with macroeconomic changes are sources of primary influences of government actions in the agricultural sector.;In this context, this study attempts to provide a political macroeconomic analytical framework to address how agricultural policies are functionally adjusted to the changes in the macroeconomy. Two working hypotheses guide the study: (1) agricultural policy decisions are endogenous responses to political influences of relevant interest groups rather than exogenous actions of government, and (2) macroeconomic changes affect the variation of political influences by interest groups which are transmitted to the agricultural policy making process.;The Korean rice price policy from 1961 to 1985 is modeled to specific empirically testable hypotheses, and three major interest groups (consumers, producers, and government) are assumed to exert political influences on rice policy making.;A political preference function is specified for testing the first hypothesis. The results successfully confirm the existence of differentiated political influences on rice policy making among the three interest groups. An econometric model consisting of 12 simultaneous equations is constructed in order to test the hypothesis on the relationship between the rice policy and the macroeconomy. Korean policy maker, accommodating the aggressive pressure from the farmers, is expected to show more favorable political preference toward the rice producers than to the other groups as long as the Korean macroeconomy advances. |
