Crop Insurance in a Political Economy: An Alternative Perspective on Agricultural Policy
从政治经济学角度建模，说明政府事前农作物保险如何通过减少事后灾害救济的扭曲，改善生产激励并提升经济与政治福利。
Lawmakers often subsidize farmers in times of financial distress. This article models this political impulse as a constraint on government farm policy, describing how ex ante government farm insurance can deter ex post “disaster relief” and improve production incentives by countering the moral hazard that otherwise prevails. Absent ex ante government policy, ex post relief takes the form of revenue insurance, which prompts excessive entry into farm production and under‐production by operating farmers. Ex ante government policy can raise economic and political welfare by buying out low productivity farmers and offering profitable farmers a combination of revenue insurance, price supports, and a program participation fee.