Showing papers on "Subsidy published in 1999"
TL;DR: In this paper, the authors examined firm debt maturity in 30 countries during the period 1980-1991 and found that stock market activity is not correlated with debt levels of small firms, while the size of the banking sector is uncorrelated with the capital structures of large firms.
747 citations
TL;DR: In this paper, the results of a gender impact evaluation study, entitled Does child labour displace schooling? Evidence on behavioral responses to an enrollment subsidy, conducted between 1995 and 1996, in Bangladesh, is presented.
Abstract: This brief summarizes the results of a gender impact evaluation study, entitled Does child labour displace schooling? Evidence on behavioral responses to an enrollment subsidy, conducted between 1995 and 1996, in Bangladesh. The study observed that the subsidy increases schooling, but its effect on child labour is ambiguous. The subsidy increased schooling by far more than it reduced child labour. Substitution effects helped protect current incomes from the higher school attendance induced by the subsidy. Substitution effects helped protect current incomes from the higher school attendance induced by the subsidy. The reduction in the incidence of child labour by boys (girls) represents about one quarter (eighth) of the increase in their school enrollment rate.
540 citations
TL;DR: The Grameen Bank of Bangladesh has been in the vanguard of the micro-finance movement, showing the potential to alleviate poverty by providing credit to poor house-holds.
413 citations
TL;DR: In this article, the authors examined the effectiveness of public social spending on education and health care in several African countries and found that these programs favor not the poor, but those who are better-off.
Abstract: Education and health care are basic services essential in any effort to combat poverty and are often subsidized with public funds to help achieve that purpose. This paper examines the effectiveness of public social spending on education and health care in several African countries and finds that these programs favor not the poor, but those who are better-off. It concludes that this targeting problem cannot be solved simply by adjusting the subsidy program. The constraints that prevent the poor from taking advantage of these services must also be addressed if the public subsidies are to be effective. Measuring the benefits of publicly provided goods to individuals is a matter of longstanding concern in the economics literature. For market-based goods and services, the prices consumers pay can be taken as reflecting underlying values and can be used to yield measures of welfare that can be compared across individuals and over time.
334 citations
TL;DR: In this paper, the authors present pricing and subsidy mechanisms that operate through a computerized market and induce the efficient provision of product evaluations, and overcome three major challenges: evaluations, which are public goods, are likely to be underprovided; an inefficient ordering of evaluators may arise; and the optimal quantity of evaluations depends on what is learned from the initial evaluations.
Abstract: Recent developments in computer networks have driven the cost of distributing information virtually to zero, creating extraordinary opportunities for sharing product evaluations. The authors present pricing and subsidy mechanisms that operate through a computerized market and induce the efficient provision of evaluations. The mechanisms overcome three major challenges: first, evaluations, which are public goods, are likely to be underprovided; second, an inefficient ordering of evaluators may arise; and third, the optimal quantity of evaluations depends on what is learned from the initial evaluations.
292 citations
Book•
01 Oct 1999
TL;DR: Kane as discussed by the authors evaluates alternative explanations for the rise in public and private college costs, weighing the role of federal financial aid policy, higher input costs, and competitive pressures on individual colleges.
Abstract: Over the past fifteen years, a college education has become increasingly valuable in the labor market. As a result, the stakes have been raised in the debate over college admissions and student financial aid. With the gap in college enrollment widening by family income, the time has come to examine the strengths and weaknesses of the American system for financing higher education and to rethink its structure from the ground up. This book begins with an overview of the many indirect ways in which Americans pay for college--as taxpayers, students, and parents--and describes the sometimes perverse ways in which state and federal financial aid policies interact. Thomas J. Kane evaluates alternative explanations for the rise in public and private college costs--weighing the role of federal financial aid policy, higher input costs, and competitive pressures on individual colleges. He analyzes how far we have come in ensuring access to all. Evidence suggests that large differences in college enrollment remain between high and low income students, even those with similar test scores and attending the same high schools. Kane promotes a package of reforms intended to squeeze more social bang from the many public bucks devoted to higher education. For example, he advocates "front-loading" the Pell grant program, limiting eligibility to those in their first two years of college, and providing a larger share of federal subsidies by assessing student resources after college rather than evaluating a single year of parents income and assets before college. Copublished with the Russell Sage Foundation
290 citations
TL;DR: This paper found that increasing economic constraints have led to an increased use of public relations materials only in specific instances that often do not support the agenda-building goals of the sponsoring organizations, and that news media are using more public relations information subsidies to contain costs and increase profits.
Abstract: Public relations practitioners provide information subsidies to the media on behalf of their clients to influence the media agenda and potentially affect public opinion. McManus (1994) stated that news media are using more public relations information subsidies to contain costs and increase profits. Through in-depth interviews and a nationwide survey, this study of editors' perceptions of the phenomenon suggests that increasing economic constraints have led to an increased use of public relations materials only in specific instances that often do not support the agenda-building goals of the sponsoring organizations.
221 citations
Posted Content•
TL;DR: The authors examined the regional distribution of public employment in Italy and found that about half of the wage bill in the South of Italy can be identified as a subsidy, with both the size of the public employment and wage levels used as a redistributive device.
Abstract: This paper examines the regional distribution of public employment in Italy and documents two sets of facts. The first is the use of public employment as a subsidy from the North to the less wealthy South. We calculate that about half of the wage bill in the South of Italy can be identified as a subsidy, with both the size of public employment and wage levels used as a redistributive device. The second set of facts concerns the negative effects of subsidized public employment on individuals’ attitudes toward job search, education, and “risk-taking” activities. We conclude that heavy reliance on public employment distorts incentives and discourages the development of market activities in the South.
201 citations
TL;DR: In this article, the authors examine the determinants and policy implications of deforestation in Mexico and include a brief review of the relevant empirical literature and a description of the theoretical model, which formalizes the relationship between deforestation and poverty government policies and local land tenure.
Abstract: This study examines the determinants and policy implications of deforestation in Mexico and includes a brief review of the relevant empirical literature and a description of the theoretical model. Land use patterns and socioeconomic and physiogeographic factors are determinants. Data were obtained from digital maps of land use and soils and the 1990 Population and 1991 Agricultural Censuses. A simple 2-period equation formalizes the relationship between deforestation and poverty government policies and local land tenure. In Period 1 representative producers in municipalities have 4 options in allocating labor time: wage generation; agricultural production; deforestation on land without clear property rights; and investment in technology. During Period 2 the options are to farm on available land and deforested areas or work in the wage sector. Findings reveal that: 1) communal land tenure (ownership by the ejido) did not increase deforestation; 2) pricing that favors maize production which is very land intensive increased deforestation and technical assistance reduced deforestation; and 3) poverty was related to higher rates of deforestation. Prices were the most important immediate factor in unsustainable resource use but other factors had an impact. The government policy mix did not support sustainable development. Reduced subsidies would benefit the environment. The government should provide safety nets to increase the level of rural investment and reduce poverty and should improve land productivity with technical inputs. Trade liberalization and elimination of subsidies should be sensitive to the poors need for real wages.
188 citations
TL;DR: In this paper, the authors examine the lobbying choices of Norwegian firms in the 1980s and find that firms with more specific assets faced potentially greater losses from adjusting to new activities in the face of competitive pressures and thus had greater incentives to lobby for subsidies to protect themselves.
Abstract: Previous research into endogenous trade policy has described extensively the political incentives of firms with specific assets, but no studies have shown directly that firms behave as predicted. We adopt insights from transaction costs economics to develop measures of asset specificity and to investigate how variation in these measures affects the political behavior of firms. In particular, we examine the lobbying choices of Norwegian firms in the 1980s. Given available subsidy funds from Norway's oil boom and some government decisions in the 1970s, firms with more specific assets faced potentially greater losses from adjusting to new activities in the face of competitive pressures and thus had greater incentives to lobby for subsidies to protect themselves. Joint contacting of Parliament and government on behalf of firm interests by representatives of both management and labor should be particularly likely where firms had specific assets. Data analysis shows that asset specificity, as indicated by R&D intensity and job immobility, predicts joint contacting independently of plausible alternative explanatory variables like firm size and export orientation.
178 citations
Posted Content•
TL;DR: The extent to which agricultural support programs have been capitalized into farmland prices has been examined in this paper, where a present value land price model was developed which decomposes returns to the land base into its two possible sources (farm production and government subsidies) and allows the discount rates associated with these two income sources to vary.
Abstract: The extent to which agricultural support programs have been capitalized into farmland prices has been examined in this study A present value land price model was developed which decomposes returns to the land base into its two possible sources (farm production and government subsidies) and allows the discount rates associated with these two income sources to vary The empirical results indicate that government payments are discounted less than marketbased returns in Ontario Thus, government payments have been viewed as a more stable source of income to Ontario farm operators during the last half century than market-based returns
TL;DR: In this article, the authors examined alternative approaches to wage subsidy programs for the young unemployed in Britain and discussed theoretical considerations, the existing empirical evidence and proposed two strategies for evaluation, an ex-post estimator and a model based ex-ante evaluation.
Abstract: This paper examines alternative approaches to wage subsidy programmes. It does this in the context of a recent active labour market reform for the young unemployed in Britain. This “New Deal” reform and the characteristics of the target group are examined in detail. We discuss theoretical considerations, the existing empirical evidence and propose two strategies for evaluation. The first suggests an ex-post ‘trend adjusted difference in difference’ estimator. The second, relates to a model based ex-ante evaluation. We present the conditions for each to provide a reliable evaluation and fit some of the crucial parameters using data from the British Labour Force Survey. We stress that the success of this type of labour market programmes hinge on dynamic aspects of the youth labour market, in particular the pay-off to experience and training.
TL;DR: This empirical study of Internet adoption in four Latin American countries delineates a gradual but progressive course of institutional actions and suggests a temporal ordering of the actions--including knowledge building, subsidy, knowledge deployment, innovation directive, and standard setting.
Abstract: This empirical study of Internet adoption in four Latin American countries delineates a gradual but progressive course of institutional actions and suggests a temporal ordering of the actions--including knowledge building, subsidy, knowledge deployment, innovation directive, and standard setting. The temporal model reveals how each country sustained the momentum of its evolving strategy, grew in competence to forge technological solutions, and gained access to the Internet. The four countries' original goals changed, but through experience they perceived new opportunities and established evolving Internet strategies that form the bases of new technological services provided at the national level.
TL;DR: In this article, the authors analyzed the costs of building these projects, where they are built, their financial viability, whom they serve, who finances them, and the size of the subsidies provided to them.
Abstract: The Low‐Income Housing Tax Credit (LIHTC) has been the de facto federal rental housing production program since its creation in the Tax Reform Act of 1986. In this article, using a detailed database on 2,554 LIHTC projects, we analyze the costs of building these projects, where they are built, their financial viability, whom they serve, who finances them, and the size of the subsidies provided to them. The LIHTC is a flexible program that has built different types of housing in various markets. While LIHTC projects serve low‐ and moderate‐income households, their rents are beyond the reach of many poor households without additional subsidy. Revenues just cover costs for many LIHTC projects. Over time, considerably more of each tax‐credit dollar has ended up in the projects, and returns to equity investors have dropped significantly, perhaps reflecting an increased understanding of project risks. We estimate that LIHTC projects developed by nonprofits are 20.3 percent more expensive than those dev...
TL;DR: In this article, the authors consider whether the dual production structure now in place in central and eastern European countries (CEECs) is efficient and stable in the medium term, and they suggest that the emergence of medium-sized, individually owned and operated farm units is the most viable option for the future in CEECs.
Abstract: This paper considers whether the dual production structure now in place in central and eastern European countries (CEECs) is efficient and stable in the medium term. The large, recently emerged corporate and co-operative farm structures may not be stable because of conflicts inherent in co-operative production under current ownership structures. Such units use high levels of capital and purchased inputs, and relative price changes for production factors may threaten their survival without subsidies. The few large individual private operators that have emerged may soon face restructuring problems, as they have been relying on cheap capital at prices that do not reflect current replacement costs. New, younger, relatively small-scale farmers appear to have major and as yet unexploited production potential. Although representing only a small share of the many family farms, they are nevertheless numerous enough to create a viable 'middle class' of commercially oriented, private farmers. Although this group currently faces severe technological and financial constraints, the emergence of medium-sized, individually owned and operated farm units is the most viable option for the future in CEECs. Copyright 1999 by Oxford University Press.
TL;DR: The importance of small-scale private sector or NGO providers of water and sanitation in a great range of urban areas in Africa, Asia and Latin America is discussed in this paper, where public policy can support (or at least not seriously constrain) small scale entrepreneurs in water and sanitary provision while ensuring checks on the quality and price of the services they provide.
Abstract: This paper describes the importance of small-scale private sector or NGO providers of water and sanitation in a great range of urban areas in Africa, Asia and Latin America. It includes many examples of where - contrary to conventional wisdom - they provide good quality, low-cost services. Without these operations, large sections of the South’s urban populations, including tens of millions of low-income households, would be worse off. Yet these generally operate with no subsidy and have to recover their costs. This paper discusses how public policy can support (or at least not seriously constrain) small-scale entrepreneurs in water and sanitation provision while ensuring checks on the quality and price of the services they provide.
TL;DR: In this paper, the authors examine the explanations for market failure in vocational training, and explore the rationale for such policies, arguing that under-investment can arise from credit constraints and uncertainty facing trainees, and from imperfect competition in the labour market which creates external benefits for firms.
Abstract: Since the Industrial Training Act of 1964, the UK government has adopted a variety of policies intended to redress a problem of under-investment in vocational training. In the 1960s and 1970s it attempted to regulate the training provided by firms, through a levy scheme. More recently, subsidised training schemes have been the centrepiece of policy. This paper examines the explanations for market failure in vocational training, and explores the rationale for such policies. Under-investment can arise from credit constraints and uncertainty facing trainees, and from imperfect competition in the labour market which creates external benefits for firms. Both subsidies and regulation can be effective in dealing with these problems, although it is argued that the training levy scheme, as implemented in the UK and other countries, should be viewed mainly as a mechanism for releasing credit constraints. Copyright 1999 by Oxford University Press.
TL;DR: The authors examined the economic justification for providing investment subsidies to foreign-owned multinationals and showed that subsidy competition can transfer much of the rents to the multinationals, which is in the national interest if the investment raises the net value of domestic production.
Abstract: We examine the economic justification for providing investment subsidies to foreign-owned multinationals. These provide employment opportunities and generate demand for domestic intermediate inputs, produced by domestic workers with increasing returns to scale. Offering subsidies to multinationals may be in the national interest if the investment raises the net value of domestic production. When agglomerative forces are sufficiently strong, a subsidy that attracts the first foreign firm may induce several to enter, establishing a thriving modern sector. With a limited number of foreign enterprises, countries may compete to attract investment. This subsidy competition transfers much of the rents to the multinationals.
Posted Content•
TL;DR: In this article, the authors conclude that export processing zones have limited applications; the better policy choice is to liberalize a country's entire economy, and they recommend that the World Bank should be cautious about supporting export processing zone projects, doing so only on a case-by-case basis, only with expert guidance, and only as part of a general reform package.
Abstract: Traditional export processing zones are fenced-in industrial estates specializing in manufacturing for exports. Modern ones have more flexible rules, such as permitting more liberal domestic sales. They provide a free-trade and liberal regulatory environment for the firms involved. Their primary goals: to provide foreignexchange earnings by promoting non-traditional exports, to provide jobs and create income, and to attract foreign direct investment and attendant technology transfer and knowledge spillover. Domestic, international, or joint venture firms operating in export processing zones typically benefit from reduced red tape, flexible labor laws, generous long-term tax holidays and concessions, above-average communications services and infrastructure (and often subsidized utilities and rental rates), and unlimited duty-free imports of raw and intermediate inputs and capital goods needed for production. In this review of experience, the author concludes that export processing zones have limited applications; the better policy choice is to liberalize a country's entire economy. Under certain conditions - including appropriate setup and good management - export processing zones can play a dynamic role in a country's development, but only as a transitional step in an integrated movement toward general liberalization of the economy (with revisions as national economic conditions change). The world Bank, writes the author, should be cautious about supporting export processing zone projects, doing so only on a case-by-case basis, only with expert guidance, and only as part of a general reform package. It should not support isolated export processing zone projects in unreformed or post-reform economies (in the last case they might encourage backsliding on trade policy). In general, if a policy is good for the economy as a whole, it is likely to be good for an export processing zone. Sound policy will encourage: 1) Sound, stable monetary and fiscal policies, clear private property and investment laws, and a business-friendly economic environment. 2) Moderate, simplified (but not"over-friendly") corporate tax schedules, and generally liberal tariffs and other trade taxes. 3) Private development and management of export processing zones and their infrastructure and unsubsidized utilities. 4) Labor laws that are business-friendly but do not abuse workers'safety and labor rights. 5) A better understanding of the impact of industrial refuse on the quality of air, soil, water, and human health.
TL;DR: In this paper, the authors analyzed the olive tree production systems in southern Spain, the subsidy systems and the soil erosion problems, and raised the question whether the subsidies could not be provided in a different way, in order to make olive tree cultivation more sustainable by reducing soil erosion and flood hazard.
TL;DR: In this article, the authors examined the implications of foreign or domestic imperfect competition in intermediate-goods supply for strategic trade policy, assuming Cournot competition, and showed that an export subsidy aimed at shifting rents from foreign to domestic final-good producers may also shift rents to foreign suppliers.
Book•
01 Jan 1999
TL;DR: This book examines the costs of health insurance premiums determined and investigates whether the healthy subsidize the unhealthy and should public subsidies vary according to economic status and risk.
Abstract: How are the costs of health insurance premiums determined? Should costs vary according to indicators of risk? How much do premiums vary with risk? Do the healthy subsidize the unhealthy? Should public subsidies vary according to economic status and risk? This book examines these questions
Posted Content•
TL;DR: In this paper, the authors explore the interaction between taxes on work-related traffic congestion and preexisting distortionary taxes in the labor market, and show that if congestion tax revenues are used to reduce labor taxes, the net impact on the labor supply is positive and the efficiency gain in the labour market can raise the overall welfare gains of the congestion tax by as much as 100 percent.
Abstract: The authors explore the interaction between taxes on work-related traffic congestion and preexisting distortionary taxes in the labor market. A congestion tax raises the overall costs of commuting to work and discourages labor force participation at the margin when revenues are returned in lump-sum transfers. The resulting efficiency loss in the labor market can be larger that the Pigouvian efficiency gains from internalizing the congestion externality. By contrast, if congestion tax revenues are used to reduce labor taxes, the net impact on the labor supply is positive and the efficiency gain in the labor market can raise the overall welfare gains of the congestion tax by as much as 100 percent. Recycling congestion tax revenues in public transit subsidies produces a positive, but smaller, impact on the labor supply. In short, the authors'results indicate that the presence of preexisting tax distortions, and the form of revenue recycling, can crucially affect the size - and possibly even the sign - of the welfare effect of road pricing schemes. The efficiency gains from recycling congestion tax revenues in other tax reductions can amount to several times the Pigouvian welfare gains from congestion reduction.
TL;DR: In this paper, the authors discuss the marriage penalty and the relationship between it and tax and transfer programs, with a particular focus on tax and tax transfer programs (e.g., Social Security and Medicare).
Abstract: Many government programs have implicit penalties or subsidies for marriage. For example, many couples pay higher income taxes when married than their combined tax liabilities as single filers, while many other couples receive a marriage subsidy because their joint taxes fall with marriage. Likewise, most low-income couples are eligible for higher welfare benefits if they are separated rather than married. This article discusses the marriage penalty, with a particular focus on tax and transfer programs. Why does it exist? Who faces it? To what extent does it affect marriage and labor market behavior? What tradeoffs are involved in reducing it?
TL;DR: In this article, the authors argue that private parties assume the risks that they can manage better than the public sector, and that they are willing to invest without special government support in the form of grants, preferential tax treatment or equity contributions.
Abstract: Driven by fiscal austerity and disenchantment with the performance of state-provided infrastructure services, many governments have turned to the private sector to build, operate, finance, or own infrastructure in power, gas, water, transport, and telecommunications sectors. Private capital flows to developing countries are increasing rapidly; 15 percent of infrastructure investment is now funded by private capital in emerging markets. But relative to needs, such private investment is progressing slowly. Governments are reluctant to raise consumer prices to cost-covering levels, while investors, mindful of experience, fear that governments may renege on promises to maintain adequate prices over the long haul. So investors ask for government support in the form of grants, preferential tax treatment, debt or equity contributions, or guarantees. These subsidies differ in how they allocate risk between private investors and government. Efficiency gains are greatest when private parties assume the risks that they can manage better than the public sector. When governments establish good policies--especially cost-covering prices and credible commitments to stick to them--investors are willing to invest without special government support. Privatizing assets without government guarantees or other financial support is possible, even where governments are politically unable to raise prices, because investors can achieve the returns they demand by discounting the value of the assets they are purchasing. But this is not possible for new investments (greenfield projects). If prices have been set too low and the government is not willing to raise them, it must give the investor financial support, such as guarantees and other forms of subsidy, to facilitate worthwhile projects that would not otherwise proceed. But guarantees shift costs from consumers to taxpayers, who subsidize users of infrastructure services. Much of that subsidy is hidden, since the government does not record the guarantee in its fiscal accounts. And taxpayers provide unremunerated credit insurance, as the government borrows based on its ability to tax citizens if the project fails, not on the strength of the project itself.
Book•
01 Oct 1999
TL;DR: In this paper, the authors examine both the history of farm subsidies and the contemporary relevance of traditional farm programmes to today's agricultural industries, and analyze the mixed performance of past agricultural support programs, review the late 1990s debate concerning farm policies, and critically assesses the often staunch political resistance to much-needed policy reforms.
Abstract: Despite substantial transformations in American agriculture, farm programme spending remains a closely guarded prerogative of United States agricultural policy. This work examines both the history of farm subsidies and the contemporary relevance of traditional farm programmes to today's agricultural industries. The text analyzes the mixed performance of past agricultural support programs, reviews the late-1990s debate concerning farm policies, and critically assesses the often staunch political resistance to much-needed policy reforms. Casting a keen eye toward recent developments on both national and international fronts, the authors consider the ramifications of the 1996 Federal Agriculture Improvement and Reform (FAIR) Act as well as multilateral efforts to gain agricultural reform during the Uruguay Round of GATT. Their prognosis hinges upon both the continued growth and competitiveness of the world market and, perhaps more importantly, the ongoing commitment of congressional reform advocates.
TL;DR: In this paper, the authors analyze the incentives and outcomes that different procedural and therefore interest group environments generate, and find that a politician is better off with a biased group monitoring the agency rather than a neutral one, since biased groups will subsidize a portion of monitoring cost.
Abstract: A number of scholars have identified the important role administrative procedures have in 'structuring' the interest group environment of government agencies: determining who can participate and in what manner. Using a formal model, we analyze the incentives and outcomes that different procedural--and therefore interest group--environments generate. The model yields a number of important conclusions. First, because elected officials are concerned not only about distributional rents, but also informational ones, the use of procedures in some cases will result in worse outcomes for political principals on the policy dimension. Officials will be willing to bear the losses in exchange for informational gains. Second, under certain conditions, a politician is better off with a biased group monitoring the agency rather than a neutral one, since biased groups will subsidize a portion of the monitoring cost. Third, having multiple interest groups, including one in opposition to the politician, makes the political principal strictly better off than any other constellation of monitors, since competing interest groups will provide the greatest information at the lowest cost to the elected official. Copyright 1999 by Oxford University Press.
TL;DR: In this paper, the authors present a cost-benefit analysis of basic infrastructure investment for low-income people in South Africa, including water and sanitation systems, new electricity lines, roads, stormwater drainage, and other services provided at municipal level.
TL;DR: In this article, the authors developed a theory of tariff protection that incorporates cooperative behavior and lobbying, and showed that cooperation between governments is sustained by threats of punishment in future periods, unless governments place too much weight on the future, the result is a cooperative tariff.
01 Jan 1999
TL;DR: In the next round of multilateral trade negotiations, some countries have indicated that they would like to create exemptions for certain production-related support, such as open space, wildlife habitat, biodiversity, an assured supply of food, and viable rural communities as mentioned in this paper.
Abstract: In the next round of multilateral trade negotiations, some countries have indicated that they would like to create exemptions for certain production-related support. These countries argue that agricultural production creates additional joint or spillover benefits, such as open space, wildlife habitat, biodiversity, an assured supply of food, and viable rural communities. They maintain that supporting agricultural production using production-linked payments enhances the multifunctional character of their agriculture. Thus, they say, production-linked payments are necessary to obtain socially desired nonfood outputs. However, a wide range of private actions and public policies can provide these nonfood outputs. Following the principle of targeting policies to their specific objectives, many nonfood products can be produced, probably with greater efficiency, without subsidized agricultural production. In addition, distorting domestic agricultural production imposes costs on other countries by distorting trade. Current World Trade Organization rules account for these costs by limiting countries' expenditures on trade-distorting domestic policies and by encouraging countries to use minimally distorting "green box" policies. Many of the targeted policies that can provide these nonfood outputs efficiently and with little or no cost to other countries are in the green box.