Political Institutions and Milk Policy Outcomes in OECD Countries

The analysis deals with the effect of electoral rules and forms of government on the outcomes of milk policy in a panel of 29 OECD countries, from 1980 to 2000. The data shows that in majoritarian elections and presidential regimes the transfer level to the dairy sector is significantly smaller than in proportional and parliamentary systems. Moreover, the effect of the farmers’ geographical concentration on dairy policy depends strongly on political institutions: a high geographical concentration of dairy farming induces more government transfers in majoritarian and presidential systems than in proportional and parliamentary ones, where the link tends to switch to negative. These empirical regularities are relatively in line with recent political economic models and with results obtained at a more aggregated level.