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Agricultural biotechnologies have the potential to offer higher incomes for farmers in developing countries and lower-priced and better-quality food, feed and fibre. That potential is being heavily compromised, however, because of strict regulatory systems in the European Union and elsewhere governing transgenically modified (GM) crops. This paper examines why the EU has taken the extreme opposite policy position on GM food to equally affluent North America, what has been the impact on developing country welfare of the limited adoption of GM crop varieties so far, and what impact GM adoption by developing countries themselves could have on their economic welfare. ; Thanks are due to Harvard's Kennedy School of Government and the Rockefeller Foundation for funding the January workshop of the KSG's Science, Technology and Globalisation Project, and to the UK's Department for International Development for supporting Anderson's research on this topic at the World Bank.

Agricultural biotechnologies have the potential to offer higher incomes for farmers in developing countries and lower-priced and better-quality food, feed and fibre. That potential is being heavily compromised, however, because of strict regulatory systems in the European Union and elsewhere governing transgenically modified (GM) crops. This paper examines why the EU has taken the extreme opposite policy position on GM food to equally affluent North America, what has been the impact on developing country welfare of the limited adoption of GM crop varieties so far, and what impact GM adoption by developing countries themselves could have on their economic welfare. ; Thanks are due to Harvard's Kennedy School of Government and the Rockefeller Foundation for funding the January workshop of the KSG's Science, Technology and Globalisation Project, and to the UK's Department for International Development for supporting Anderson's research on this topic at the World Bank.

It has taken until the Uruguay Round for agriculture to be brought under the discipline of the GATT rules-based trading system. This paper first examines the extent to which the Round's Agreement on Agriculture provides the necessary discipline on farm policies, what reform implementation progress has been made to date, and what problems remain for the next Round of negotiations. It notes that the new rules for agriculture are far from ideal, and the extent of reform commitment is quite minor for the rest of this decade, but at least a start has been made. An important conclusion for net food-importing developing countries is that they need not fear a GATTinduced increase in the price of their food imports; on the contrary, any food price rise that might occur because of the Round's implementation will be so small as to be indistinguishable amidst the many other economic forces at work in international commodity and foreign exchange markets. ; Thanks are due to the Australian Research Council for financial support.

Recent globalization has been characterized by a decline in the costs of cross-border trade in farm and other products. It has been driven primarily by the information and communication technology revolution and-in the case of farm products-by reductions in governmental distortions to agricultural production, consumption and trade. Both have boosted economic growth and reduced poverty globally, especially in Asia. The first but maybe not the second of these drivers will continue in coming decades. World food prices will depend also on whether (and if so by how much) farm productivity growth continues to outpace demand growth and to what extent diets in emerging economies move towards livestock and horticultural products at the expense of staples. Demand in turn will be driven not only by population and income growth, but also by crude oil prices if they remain at current historically high levels, since that will affect biofuel demand. Climate change mitigation policies and adaptation, water market developments and market access standards particularly for transgenic foods will add to future production, price and trade uncertainties. ; The author is grateful for financial assistance for some of the underlying research from the World Bank and the Australian Research Council.

As part of a comprehensive review of Australia's tax system, the taxes on alcoholic beverages recently came under scrutiny. In its initial response to the review in May 2010, the government chose to not change those taxes, even though the review recommended the wine tax switch from an ad valorem to a volumetric basis and that all beverages be taxed to the same extent per litre of alcohol. This paper introduces a mini-symposium of three other papers aimed at contributing to what will be an on-going public policy debate on the optimal taxation of alcohol for purposes of covering social costs associated with harmful alcohol consumption, influencing consumer behaviour through altering beverage prices levels and relativities, and raising government revenue.

Earnings from farming in many developing countries have been depressed by anti-agricultural biases in own-country price and trade policies, as well as by governments of richer countries favoring local farmers with import barriers and subsidies. Both sets of policies reduce national and global economic welfare, add to global inequality and poverty, and are mostly the result of trade restrictions. Yet until recently they have not been disciplined by the GATT or WTO. New evidence illustrates where the GATT and WTO have failed to prevent rises in agricultural protectionism, including in developing countries. Global economy wide modeling results reveal that substantial trade policy reform has been achieved since the mid-1980s in ways that have helped developing country farmers, but that there remains very considerable scope for further farm policy reform. In the decades ahead, the effects of policies on farmers and others in developing countries depend on whether an ambitious Doha Round agreement is signed and countries continue the recent trends towards free trade. Should Doha fail, agricultural protectionism may well grow in emerging economies, suggesting that the stakes in the Doha Round are much higher than is traditionally believed. ; Financial assistance from World Bank Trust Funds (particularly those provided by the governments of Japan, the Netherlands and the United Kingdom), and the Australian Research Council is gratefully acknowledged.

Earnings from farming in many low-income countries have been depressed by a pro-urban bias in own-country policies, as well as by governments of richer countries favouring their farmers with import barriers and subsidies. Both sets of policies reduce national and global economic welfare. The rapid development of many Asian emerging economies has been accompanied by a gradual reduction in their anti-agricultural policies, but many distortions remain and some countries have moved from negative to positive assistance for farmers, following the earlier examples of first Japan and then Korea and Taiwan. Drawing on results from a new multi-country research project, this paper examines the extent of these changes relative to those of other developing countries over the past five decades. It concludes by pointing to prospects for further policy reform in Asia.

Phasing out distortionary government subsidies and barriers to international trade will yield extraordinarily high benefits relative to any adjustment costs, notwithstanding the considerable reforms that have already taken place over the past two decades. The present paper surveys recent estimates, using global economy-wide simulation models, of the benefits of reducing remaining distortions by means of unilateral reform, multilateral trade negotiations and preferential trading arrangements. Distortionary trade policies harm most the economies imposing them, but the worst of them (in agriculture and clothing) are particularly harmful to the world's poorest people. Opportunities to reduce remaining distortions, including by means of the WTO's Doha Development Agenda as compared with subglobal preferential reform, are examined, before drawing out the implications of liberalisation for poverty and the environment. ; Thanks are due to Denmark's Environmental Assessment Institute and The Economist for financial support for, a longer survey for the Copenhagen Consensus Project on which this one draws.

Economies well endowed with natural resources relative to other factors of production have grown slower than other economies over the long term. In reviewing possible explanations for this, the article finds unconvincing such common suggestions as declining terms of trade and rising restrictions to primary product markets abroad. It suggests the most likely reason is these countries' own distortionary policy regimes. Recent reforms in some resource-rich economies are already yielding growth dividends. The article also examines the impact of the greening of world preferences and politics on the prospects for resource-abundant economics.

It has taken until the Uruguay Round for agriculture to be brought under the discipline of the GATT rules-based trading system. This paper first examines the extent to which the Round's Agreement on Agriculture provides the necessary discipline on farm policies, what reform implementation progress has been made to date, and what problems remain for the next Round of negotiations. It notes that the new rules for agriculture are far from ideal, and the extent of reform commitment is quite minor for the rest of this decade, but at least a start has been made. An important conclusion for net food-importing developing countries is that they need not fear a GATTinduced increase in the price of their food imports; on the contrary, any food price rise that might occur because of the Round's implementation will be so small as to be indistinguishable amidst the many other economic forces at work in international commodity and foreign exchange markets. ; Thanks are due to the Australian Research Council for financial support.

Both the mining and the burning of coal is polluting, so we might expect to observe taxes on coal production and consumption. Yet several countries of Western Europe subsidize coal production, and most East European countries subsidize coal consumption. The first part of this paper shows that those subsidies, which are emulated by other rich and poor countries respectively, have become enormous. Neoclassical political economy is used to examine why governments adopt such inappropriate policies when they are so wasteful of resources and damaging to the environment. Several new and offsetting political forces have been at work in Western Europe in recent years though, causing some countries to dismantle their coal producer subsidies. The paper concludes that these pressures for reform will continue to operate in the few remaining protectionist countries; if coupled with more commercial diplomatic pressure from coal exporting countries, they could be sufficient to see the end of such protection by early next century. ; Financial support from SNS Energy and the Australian Research Council is gratefully acknowledged.

Numerous empirical studies have been undertaken in recent years on the extent to which government policies distort incentives to produce and consume farm products, and on the trade and economic welfare consequences of those distortions or their liberalisation (e.g. OECD, 1987 and 1990a; Parikh et al., 1988; Stoeckel et al., 1989; and Tyers and Anderson, 1992). Those studies show clearly that policies of rich countries tend to assist farm sectors with food import barriers and production and export subsidies, that policies of poorer countries tend to discourage farm production, and that both sets of policies reduce economic welfare as conventionally measured. Such studies however, typically say little or nothing about the effects of agricultural policies on the natural environment, and so account for less than the full effects of those policies on social welfare. Neither do they examine environmental policies as part of the package of governmental interventions that are affecting (or could be introduced to affect) agricultural production, consumption and hence trade and welfare. This paper seeks to help redress that imbalance by addressing the question: how would agricultural trade liberalisation by one or more groups of countries affect the natural environment, and hence economic welfare, broadly defined to include not just the consumption of marketed goods and services but also the utility which society derives from the environment?

This paper applies the emerging neoclassical economic theory of politics to the question of why some industries receive more government assistance than others. Various determinants of the incentives for interest groups to demand assistance and for governments to supply assistance are suggested on a priori grounds. An attempt is then mode to see how well these factors can explain (I) the differences between rates of assistance to Australia's munufacturing industries at various points in time between 1968–49 and 1977–78. and (2) the different changes in those rates during the mid-1970s. The evidence generally supports the theory, and prompts some suggestions as to how to reduce existing government distortions.

For more than a century, government policies have grossly distorted resource use in agriculture, both within and between countries. Earnings from farming in many developing countries have been depressed by a prourban bias in own-country policies as well as by governments of richer countries favoring their farmers with import barriers and subsidies. Both sets of policies reduce national and global economic welfare and inhibit economic growth; they also add to inequality and poverty in developing countries. Since the 1980s, however, numerous developing and some high-income country governments have reduced their sectoral and trade policy distortions. This paper draws on new empirical studies to show the changing extent of policy distortions to prices faced by the world's farmers since the 1950s. Modeling results provide an indication of how far those reforms proceeded between the early 1980s and 2004 and of how much scope remains for removing continuing inefficiencies in global agricultural resource use.

The vast majority of the world's poorest households depend on farming for their livelihood, as would many of the rest had prospects in agriculture not been so bleak as to force them into non-farm activities in search of a higher income. Earnings from farming have been depressed in low-income countries partly because own-country policies typically have had a pro-urban, anti-agricultural bias, and partly because richer countries (including some developing countries) assist and protect their farmers with import barriers and subsidies. Numerous developing country governments have made considerable progress over the past two decades in reducing their own sectoral and trade policy distortions, and many of them now believe high income countries should reduce their remaining protectionism that harms developing country exports of farm (and textile) products. Indeed one of the key difficulties in the World Trade Organization's ('WTO')1 current round of multilateral trade negotiations (known as the 'Doha Development Agenda') is the fact that developing countries are calling for such commitments on farm policies before they will consider offering any further reform commitments of their own.