The Political Economy of Regulation of Biotechnology in Agriculture - The Oxford Topic of Food, Politics, and Society - page 663

The arguments in this chapter build upon the political-economy literature and, in
particular, its applications to agricultural and environmental policy. First, we review the
main findings of this literature in Section 1. We follow this with a simple conceptual
voting model in Section 2, to illustrate how political choices regarding GM crops can
be understood to have evolved over time, shaped by the evolving influences of various
interest groups together with availability of new information. This analysis suggests that
understanding policy outcomes requires careful identification of the salient interest
groups affecting biotechnology policies, their benefits and losses that result from those
policies, and their respective political weights and influence. Section 3 then reviews
the major findings of the agricultural economics literature regarding the distributional
impacts of the adoption of GM crops within the agricultural economy, which provides
a starting point for us to then consider how the introduction of GM crop varieties
affects the economic welfare of other groups within society as well. We then present,
in Section 4, our political-economic analysis of the formation and evolution of agricul-
tural biotechnology policies in Europe, considering the salient interest groups affecting
and affected by biotech policies. Analysis includes not only consumers, farmers, and
environmental interest groups, but also industrial sectors—differentiating, in particu-
lar, the interests of the seed and agrochemical businesses—and emphasizes the impor-
tance of differences in the alignment of interests in some cases from country-specific
perceptions.
We conclude that, in Europe and other countries where agricultural biotechnologies
continue to be heavily restricted or banned outright, these policy outcomes are rational
results of the vulnerabilities of the underlying economic welfare of the major interest
groups to the introduction of this disruptive technology. The innovations of agricultural
biotechnology have unleashed a wave of “creative destruction” (Schumpeter 1934). The
political system responds to demands to protect the interests of some groups with capi-
tal stocks at risk of destruction in the face of technological innovation, but also to those
interest groups positioning themselves to capture the benefits of its creativity. The dis-
tribution of these groups varies across countries, and also over time as new informa-
tion becomes available. The result is a highly complex equilibrium with path-dependent
effects in regulatory institutions and rules.
Literature on the political economy
of regulatory policies
The “Classic” Political-Economy Literature
Economists have long understood that economic choices are determined by politi-
cal systems as well as by markets; a large body of literature assesses how collective or
public choices affect economic outcomes. This literature distinguishes between two
public choice mechanisms: one involving voters and the other involving regulators