SAKUYAMA Takumi    Department   Undergraduate School  , School of Agriculture    Position   Professor
Language	Japanese
Publication Date	2010/12
Type	Academic Journal
Peer Review	Peer reviewed
Title	Determinants of tariff dependence in agricultural protection in developed countries: An empirical analysis using panel data
Contribution Type	Sole-authored
Journal	Studies in Regional Science
Journal Type	Japan
Publisher	Japan Section of the Regional Science Association International
Volume, Issue, Page	40(3),pp.679-694
Details	The agricultural sector can be protected either by tariffs or subsidies. Most developed countries have moved away from tariffs to subsidies, but Japan remains extensively reliant on tariffs for agricultural protection. This article explores the determinants of tariff dependence in agricultural protection through a regression analysis using panel data for 10 OECD countries. The hypotheses explaining the preference for tariffs over subsidies to be verified are threefold: (i) "revenue motive hypothesis" emphasising the budgetary constraints by governments or lower collection costs of tariffs, (ii) "incomplete information hypothesis" arguing that taxpayers understate social costs of tariffs and overstate those of subsidies, (iii) "collective action hypothesis" focusing on the collective good nature of tariffs that lead to free-riding among interests groups, lower lobby competition and smaller welfare losses. The regression analysis reveals that the revenue motive and incomplete information hypotheses are validated given that the coefficients of government debt ratio and tertiary attainment ratio are statistically significant with the expected signs. However, the collective action hypothesis is not supported. Japan's high tariff dependence is largely explained by increased government debt so securing stable revenue sources is indispensable if Japan is to move away from tariff to subsidy protection.