Protection provided to declining industries is generally explained as founded in the judgement that specific factors, which do not have the opportunities for adjustment available to mobile factors,1 ought be cushioned against income losses due to falls in the world price of their industry's output. The argument is that moral hazard causes private insurance markets for income maintenance to fail, so obligating governments to provide social insurance against income losses; or, alternatively, some form of altruistic notion of fairness is viewed as underlying protection of individuals' incomes in face of exogenous change. Whether the social insurance or altruism view is taken, the authorities are seen as responding to social justice considerations in providing industries adversely affected by changes in world prices with compensating protection, at least temporarily to ease difficulties in adjustment-although the industry itself may influence the level and timing of protection by lobbying to make its plight known.2 This paper presents an alternative to social justice perspectives on declining industry protection. Protective responses for declining industries are considered when the authorities, rather than seeking social welfare objectives, pursue their own self-interest motives to maximize political support.? An adaptation of the Stigler-Peltzman regulatory model is used herein to describe a political support equilibrium for a protected industry. Section I reviews their model for background purposes, and reinterprets the gainers and losers from government intervention in a Ricardo-Viner setting. Section II introduces a distinction in the evocation of political-support response between changes in the gainers' and losers' welfare that derive from administrative decisions and changes that are the consequence of exogenous market forces. The authorities' self-interest response to declines in the world price of an industry's output is then established. Section III presents a brief concluding summary and contrasts social justice perspectives on declining industry protection with the outcome when political self-interest motives underly intervention.

Declining Industries and Political-Support Protectionist Motives: Errata

We propose a theoretical framework to analyze the conditions under which a farmer facing production uncertainty (due to a possible water shortage) and incomplete information will adopt a more efficient irrigation technology. A reduced form of this model is empirically estimated using a sample of 265 farms located in Crete, Greece. The empirical results suggest that farmers choose to adopt the new technology in order to hedge against production risk. In addition, we show that the farmer's human capital also plays a significant role in the decision to adopt modern, more efficient irrigation equipment.

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Technology Adoption under Production Uncertainty: Theory and Application to Irrigation Technology

https://ir.lib.uwo.ca/cgi/viewcontent.cgi?article=1006&context=economicscsier_wp

Trade and the gains from trade with imperfect competition

This paper reviews and compares the most common approaches used to evaluate public agricultural research investment. Ex post studies fall into two major groups: (a) consumer and producer surplus analyses, estimating average rates of return to research, and (b) production function analyses, estimating marginal rates of return to research. Ex ante studies fall into four groups: (a) those using scoring models to rank research activities, (b) those employing benefit-cost analysis to establish rates of return to research, (c) those using simulation models, and (d) those using mathematical programming to select an optimal mix of research activities.

Evaluating Returns to Agricultural Research: A Review

Learning and information accumulation are hypothesized to play a major role in innovation diffusion. For instance, Hiebert argues that the probability distributions of new (and unfamiliar) technological parameters, as perceived by farmers, will shift over time due to learning and experience. Probabilities will be redistributed from lower to higher payoffs. This induces farmers to increase their use of the innovation, which was new seed varieties in the Hiebert model. The model presented by Kislev and ShchoriBachrach introduces in the new technology production function an efficiency factor which is positively related to learning. It is approximated by the cumulative (over time) output produced with the innovative technology. As learning increases, the innovation becomes advantageous for more and more producers who then adopt it. In a similar vein, Feder and O'Mara construct a diffusion process where uncertainty about an innovation (high-yielding varieties [HYV]) depends on cumulative area allocated to HYV. This represents experience. With the accumulation of experience, uncertainty declines, and the innovation is adopted by an increasing proportion of producers. These models produce sensible (and empirically valid) hypotheses about the dynamics of innovation diffusion. However, the accumulation of information, which is the basic driving element in these models, is not treated explicitly. Thus, the use of cumulative output, or a cumulative input as an index of learning, while plausible, still requires formal justification. One possibility is a Bayesian learning process. Indeed, the work by O'Mara (1971, 1981) and more recently by Lindner, Fischer, and Pardey have utilized Bayes theorem to characterize an individual farmer's adoption behavior.

Farm size and the diffusion of green revolution technology ; On information and innovation diffusion : a bayesian approach

Adoption of agricultural innovations: The case of drip irrigation of cotton in Israel

Domestic monopoly and redundant tariff protection

The black market for foreign exchange: An international comparison

The water market in Israel: An example for increasing the supply

The quite extensive literature on trade barriers has recognized that a tariff may not be fully exploited,1 a phenomenon sometimes termed 'water-inthe-tariff', but it has invariably assumed that quotas, once purchased by potential importers, are entirely utilized. However, the size of an import quota may not be indicative of the volume of goods imported. The purpose of this paper is to consider the circumstances in which such under-utilization might arise. In our analysis, we shall, of course, be concerned only with quotas which have a protective effect on domestic output; that is, we abstract from the trivial case where marginal units of a quota are not utilized because the quota exceeds the free-trade competitive level of imports. A necessary condition for a protective quota to be marginally redundant is market imperfection. This is so because competitive firms will bid for quota rights until the world price (which we shall assume exogenous) plus the quota rights price is equal to domestic marginal cost; having purchased quota rights, they will maximize profits by utilizing all available quota units to provide imports. We shall consequently focus on the case where the domestic market is monopolized. We also assume that the authorities have a non-economic

Gideon Fishelson

Papers

Adoption of agricultural innovations: The case of drip irrigation of cotton in Israel

Domestic monopoly and redundant tariff protection

The black market for foreign exchange: An international comparison

The water market in Israel: An example for increasing the supply

On Water in the Quota