Understanding the Drivers of Agricultural Policy Reforms in Malawi: An Econometric Test of Applicability of Political Economy Theories

Abstract

The level of implicit tax on maize producers has shown variation over the years. Theoretical literature provides a number of probable explanations as to why protection or taxation in this case varies over time. These theories and hypotheses include rent seeking activities by government agents, international donor pressure, competition for support during electoral years, lobbying activities by interest groups, changes in ratio of agriculture incomes to the rest of the economy and food self sufficiency. Using a Newey –West regression the theoretical explanations on what drives policy in developing nations were tested and it was observed that pressure from international donors that include the International Monetary Fund, Rent seeking behavior by public officials, collective action by interest groups, national food sufficiency goals, political support motives of the regime, and regime change resulted in agricultural policy changes in Malawi.

Keywords: Policy reform, collective action, rent seeking, interest groups, elections