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World Trade Review (2011), 10. 3, 409-421
© Cambrdqge University Press

Book Reviews

doi:10.10171S1474745611000231

The Globalization Paradox: Democracy and the Future of the World

Economy
by Dani Rodrik
New York: Norton, 2011

Dani Rodrik is well-known as a critic of 'globalization'. Over a span of more than a

decade, he has written numerous books, articles, and blog posts in which he takes issue
with various aspects of international economic regulation. His latest effort is The
GlobalizationParadox:Democracy and the Future of the World Economy. For those
of who have read his past works, much of the book will be familiar. In this new book,
he attempts to synthesize many of the specific arguments he has developed over the
years, and he also incorporates his thinking on the recent financial crisis. The result is
several proposals for changes to the existing international architecture of globalization.
In the final chapter of the book, he offers up what he refers to as 'A Sane
Globalization', involving suggestions related to trade, finance, and labor migration.
This review focuses on his discussion of the trade issue. I begin with a brief overview of
Rodrik's description of the problems with the current trade regime and his suggestions
for reform. I then offer a number of critiques of his arguments.
Rodrik starts the discussion of the problems he sees in today's trade regime by
drawing a simple contrast between the GATT and the WTO. Put simply, in his view,
the GATT was limited and good, whereas the WTO overreaches and is therefore bad.
Looking at some specifics, Rodrik observes that under the GATT: (1) sensitive
areas such as agriculture, textiles, and services were mostly excluded from the rules;
(2) developing nations made few commitments to liberalize; and (3) import protection
could be achieved through anti-dumping and safeguard measures. In addition to these
substantive limitations to the GATT, Rodrik calls the GATT's enforcement powers
'a joke' and its obligations 'patently unenforceable' (pp. 72-74). As a result, any
substantive obligations were of limited effectiveness.
While many people would (and did) consider these characteristics of the GATT to be
flaws in need of correction, Rodrik sees them as positives. He attributes the GATT's
'success' to its ability 'to achieve the maximum amount of trade compatible with
different nations doing their own thing', that is by keeping intrusion into domestic
affairs to a minimum (p. 75).
By contrast, he argues, the WTO pursues 'hyperglobalization', with its rules now
applying to the previously excluded sectors, and also to such areas as intellectual
property, health and safety rules, and subsidies (p. 78). In this regard, he says that
while GATT cases were 'largely about tariffs and quotas', WTO disputes 'reach into
domestic areas that were previously immune from external pressures' (p. 79). He notes
that under the GATT's 'shallow integration', the trade regime 'require[d] relatively
little of domestic policy'. By contrast, under the 'deep integration' of the WTO,
410 BOOK REVIEWS

'any discretionary use of domestic regulations can be construed as posing an impedi-

ment to ... international trade' and thus '[g]lobal rules in effect become the domestic
rules' (p. 83).
Rodrik later picks up this same theme when he talks about how globalization ' gets in
the way of national democracy' (p. 190). He gives several examples in this regard,
including the following: high labor, health and safety standards in some countries
being undermined by low standards in other countries; and high tax rates in some
countries being undermined by low rates in other countries (pp. 190-197).
He also mentions in this context one of his biggest concerns with the constraints
imposed by international economic regulation: restrictions on the use of 'industrial
policy' by developing countries as part of their efforts to achieve economic develop-
ment. Industrial policy is a vague term, covering a lot of ground, so it is useful to look
at the specific examples he gives: export subsidies, domestic content requirements, and
the unencumbered use of others' intellectual property (pp. 198-199). In Rodrik's view,
these are useful tools to promote industrialization, and the WTO's restrictions on such
measures are therefore problematic.
Rodrik then presents what he calls the 'Trilemma' that results from the 'tension
between national democracy and global markets', that is from the intrusion of the
rules of globalization into the domestic policy-making arena. There are, he says, three
options to deal with this tension. We can 'restrict democracy', by disregarding the
wishes of the people of particular countries; we can 'limit globalization'; or we can
'globalize democracy'. But we cannot have hyperglobalization, democracy, and
national self-determination all at once (p. 200). In this regard, Rodrik says that he is
skeptical of 'global governance' because 'there is simply too much diversity in the
world for nations to be shoehorned into common rules, even if these rules are somehow
the product of democratic processes' (pp. 203-204).
He then turns to his proposals for remaking globalization, which involve limiting
globalization so as to reduce the tension described. Chapter 11 sets out some key
principles, and Chapter 12 contains specific proposals. The principles are as follows: 1.
'Markets must be deeply embedded in systems of governance'; 2. 'Democratic
governance and political communities are organized largely within nation states,
and are likely to remain so for the immediate future'; 3. 'There is no "one way" to
prosperity'; 4. 'Countries have the right to protect their own social arrangements,
regulations, and institutions'; 5. 'Countries do not have the right to impose their
institutions on others'; 6. 'The purpose of international economic arrangements must
be to lay down the traffic rules for managing the interface among national institutions';
and 7. 'Non-democratic countries cannot count on the same rights and privileges in
the international economic order as democracies' (pp. 237-247). Of great importance
here is principle 2, which holds that nation states are the foundation of governance.
For Rodrik, globalization should not undermine this principle. Related to this is
principle 4, which ensures that nations are able to regulate without intrusion from
international rules and institutions. These two principles seem to guide his specific
proposals.
Finally, he concludes with a chapter entitled 'A Sane Globalization', in which he sets
out his vision for change to the trade regime. Here, he first notes that given what has
already been accomplished in trade negotiations, there is not much liberalization left to
 BOOK REVIEWS 411

do, so any gains would be minimal (p. 252). Instead, he says, future trade negotiations
should be about 'policy space' (p. 253). A key element of this is an expanded
'safeguard' mechanism, which he refers to as 'Developmental and Social Safeguards'.
These safeguards would allow for trade restrictions and the suspension of WTO
obligations - an 'opt-out' from the normal rules - for a number of purposes, such as:
'distributional concerns, conflicts with domestic norms and social arrangements,
prevention of the erosion of domestic regulations, or developmental priorities'. Trade
restrictions would only be available where certain procedural requirements were met:
the country 'would need to demonstrate that it followed democratic procedures in
reaching the determination that the safeguard measure is in the public interest', with
relevant criteria in this regard including 'transparency, accountability, inclusiveness,
and evidence-based deliberation' (pp. 253-254). In this way, the safeguards would
create 'policy space' for governments to regulate, and as a result would make the trade
regime more stable and legitimate.
There are a lot of good things to say about Rodrik's writings on globalization issues.
Unlike some critics of the current trade regime, he takes a very measured, thoughtful
and balanced approach. Over the years, he has developed and refined his views, and in
this book puts forward a set of policy proposals that might be taken up. He is not
calling for a full-scale reversion to protectionism, as some critics of the system seem to
want. Rather, he wants to see a moderated form of global trade regulation, which
allows for more protectionism than he believes is currently permitted. Whether the
substance of what he is proposing can be brought within the mainstream view of trade
economists and policy-makers is unclear, but he is trying to make the best case possible
for it.
With regard to the substance of his arguments, there are a number of general points
that merit further discussion, some of which overlap. I address here the following: The
role of policy space; the scope of the trade regime; and the relationship of democracy,
sovereignty, and global governance.
Before turning to these issues, though, it is worth noting a couple more
technical points. First, Rodrik's version of the history of the GATT and WTO may
be somewhat misleading. In terms of the substance, the GATT was not as 'shallow'
or 'unenforceable' as he indicates. On the issue of shallow versus deep integration,
non-discrimination was one of the GATT's core principles from the outset, and Rodrik
at times seems unaware of how broad the principle of non-discrimination can be. Such
a requirement effectively reached all domestic policies, in the sense that all polices
must not be discriminatory. That is, every measure a government takes in every area of
regulation must comply with this requirement. Rodrik himself provides, later in the
book, an example of the GATT's broad scope when discussing the Thailand-Cigarettes
case (p. 195). But he does not seem to connect this case to his earlier discussion of the
scope of the GATT.
As to the enforceability of the GATT, it has been argued that GATT rules were
actually just as effective, in terms of usage and achieving compliance, as WTO rules
(Posner and Yoo, 2005; for a response, see Davey, 2006, and more generally Bown,
2004 and Hudec, 1993). The instincts of most trade lawyers tell them that this is a bit
of a stretch, and while empirical analysis of this issue is difficult, it is probably safe to
say that WTO rules are, in important ways, more enforceable than were the GATT
412 BOOK REVIEWS

rules. Nonetheless, there is good evidence that GATT was not 'a joke', as Rodrik puts
it, in terms of its enforcement mechanism.
Furthermore, the GATT was also not as successful as he makes it out to be. In fact,
it was, in part, the substantive and procedural gaps he points out that led key GATT
contracting parties to create the WTO. Presumably, these countries did so because
they found the GATT rules to be lacking. If the WTO does pursue more intrusive
globalization, it is because the governments wanted these new, expansive rules.
The converse of his mischaracterization of the GATT as extremely limited in nature
is that the WTO is not as deep, enforceable, or unsuccessful as he makes it out to be.
Without a doubt, integration under the WTO is deeper than under the GATT, but it is
nothing close to the supra-national regulation and harmonization seen in the European
Union. And while the enforcement mechanism is stronger than under the GATT, there
have been a number of WTO disputes where enforcement procedures have not
achieved results very quickly (or sometimes even at all, such as with the Hormones case
he mentions a number of times). As to the overall success of the WTO, this is a difficult
point to assess. However, despite troubles with the current negotiations, there are
many aspects of the WTO, such as the dispute settlement mechanism, that have held up
quite well.
Another technical point is that his argument about tariffs being quite low these
days, and thus liberalization perhaps having only limited benefits, could be questioned.
A quick look through World Tariff Profiles 2010 (WTO/ITC/UNCTAD, 2010) shows a
wide range of tariffs in the double digits. Tariffs may not be as high as they used to be,
but there are plenty of high ones. Thus, it is possible that additional tariff reductions
could provide more significant economic benefits than he suggests.
Finally, Rodrik's focus is still on the WTO, and he pays little attention to the sig-
nificant growth of bilateral and regional trade agreements. These agreements have
gone well beyond WTO rules in many ways, including expanded intellectual property
protection, investor-state dispute settlement on a variety of substantive investment
issues, and enforceable labor and environment provisions. It would have been
interesting to see these issues incorporated into his analysis. In addition, in the WTO
context it may be possible to make the argument that rich countries control the agenda
and force developing countries to accept unfavorable terms (although the role of
developing countries has recently grown so as to raise skepticism about this argument).
However, the spread of bilateral and regional trade agreements among a wide and
varied group of developing countries undermines this point. The fact that developing
countries are taking on obligations under these kinds of trade agreements suggests that
they view themselves as benefiting from the commitments involved.
Putting these technical criticisms aside, and returning to the three overarching issues
noted above, the important question is the sensibility of his substantive policy propo-
sals, the core of which is his desire to give national governments additional regulatory
flexibility. In this regard, there are a number of problems with Rodrik's approach, as
well as perhaps a missed opportunity.
Turning to the key substantive points, one of Rodrik's long-standing arguments is
that countries need more policy space than they are currently given under international
trade rules. Rodrik says he wants 'smart globalization, not maximum globalization',
which will be achieved by a 'thin layer of international rules that leaves substantial
 BOOK REVIEWS 413

room for maneuver by national governments' (p. xix). There seem to be two main
elements to the policy space argument. First, he wants developing countries to be able
to use 'industrial policy' to promote their economic development. And, second, he
wants all countries to have the ability to pursue important social policies, without
interference from international trade rules.
In responding to these points, it is important to note at the outset that it is not clear
there really is a lack of 'policy space', of either sort, under existing rules. Arguably, the
rules are quite flexible. It is easy to point to specific instances where a particular
government measure was found to violate WTO rules, as Rodrik does when he ident-
ifies the US-Gasoline,Japan-Alcoholic Beverages, and US-Shrimp decisions (among
others) (p. 80). But a finding that a government was in violation does not necessarily
mean the government did not have the policy space to achieve its goals. It may just
mean that the measure in question was an instance of disguised protection, rather than
a measure legitimately intended to pursue the policy in question (which most people
would agree was the situation in the Gasoline case). Or it might mean that the
government chose a prohibited means of doing something when there were other,
permissible avenues (e.g., Rodrik seems concerned about local content requirements
being prohibited, but tariffs, which are regulated but not prohibited by the WTO, could
be used to achieve the same goals). While some of the cases he cites may illustrate
overreaching by WTO rules, others are fairly straightforward applications of the non-
discrimination principle.
With regard to the two kinds of policies at issue, I turn first to industrial policy,
which he advocates as a way for developing countries to achieve economic growth and
industrialization. Rodrik takes the view that economic development results from active
government intervention, in particular in the form of protectionism, in the economy.
This is a fairly widespread view. Of course, there is also a widespread opposing view,
which is that free trade is much better for economic development. This debate has
been going on for hundreds of years, and is likely to continue for hundreds more. But
regardless of who is right on this issue, two key points need to be made.
First, WTO rules allow many kinds of industrial policy. The WTO does not elim-
inate all protectionism. It merely restricts and regulates it. Under the rules, developing
countries have a great deal of flexibility to pursue protectionism. This flexibility is not
unlimited, but is fairly broad. To take just a few examples, there are the special rules
in GATT Article XVIII for developing countries who wish to impose trade restrictions
(1) as a way to address balance of payments difficulties or (2) for economic develop-
ment reasons; special rules on export subsidies for developing countries, as set out in
SCM Agreement Article 27.4; and, more generally, developing countries make far
fewer tariff reduction commitments than rich countries do. In addition, anti-dumping
and safeguards, two of the policies Rodrik mentions when discussing the GATT
favorably, are still widely used. While such measures have sometimes been challenged
successfully at the WTO, the vast majority of them are not even contested (Durling,
2003). These are not development policies per se, but they illustrate how protectionism
may still be used.
To illustrate his point, Rodrik says that after China's accession to the WTO, trade
rules forced China to stop using traditional industrial policy measures, and switch to
currency devaluation as a means to promote its domestic economy. In Rodrik's view,
414 BOOK REVIEWS

the trading system would be better off if China had more flexibility to use the old
methods (pp. 276-277). But examining China's tariffs, the average applied tariff is
above 10 % for the majority of product categories (WTO Tariff Profile). And when
looking at individual tariff lines, higher tariffs are immediately apparent for a number
of products (WTO Tariff Data). Thus, China does seem to have considerable flexibility
to use industrial policy under the existing rules.
Second, when talking about development, Rodrik seems to take the view that this is a
developing versus developed country issue. In his view, developed countries should
stand back and let the developing countries do whatever they want in this regard. In
response, there is a political point to be made here, which is that developed countries
are unlikely to do this for the more advanced developing countries, such as Brazil and
China. But regardless, there is also the problem of competition among developing
countries. Let's say that the rules allowed unlimited subsidies by governments of
developing countries, as Rodrik seems to suggest they should (p. 256). If that were the
case, would that not lead to subsidy wars between developing countries? If China and
India both were to use subsidies to develop their automobile industries, there would
likely be substantial trade conflict. The point of the trade regime is to establish an
agreed set of rules to help mitigate this conflict, for example by putting constraints on
subsidies.
I now turn to the issue of social policies. Another way to think about the 'policy
space' that governments have is to talk about the scope of the trade regime and how
trade rules affect domestic policy-making. The scope will affect how much policy space
there is. Arguably, Rodrik identifies a fundamental problem with trade rules when he
says: 'the absence of a clear and bright line between where domestic prerogatives end
and external obligations begin creates substantial friction. In fact, the trade regime's
growing legitimacy crisis can be traced back to this fundamental ambiguity' (p. 81).
But it is not clear that his proposals help the matter. As discussed below, even if the
principles he would use to define the scope of the trade regime do establish clear
boundaries, and it is not clear that they do, his specific proposals may not achieve his
goals as well as some possible alternatives might.
One of his core proposals, which he has set out elsewhere in more detail (Rodrik,
2007), is the expanded safeguard mechanism. Under this mechanism, after a domestic
procedure to ensure the legitimacy of the objectives pursued has been undertaken,
governments could impose trade restrictions for various social purposes. So, for ex-
ample, he notes that [a] labor union may win protection when its members are forced
to compete against workers abroad who toil in blatantly exploitative conditions'
(p. 255).
But query whether trade restrictions are really the best approach here. For example,
is a 20% tariff on foreign goods really the best way to protect domestic labor
standards? Rodrik can accept such measures if they are the result of a satisfactory
domestic process. However, trading partners may not be mollified by this. A 20 % tariff
looks suspicious in part because regardless of the purported goals, there is a protec-
tionist effect. Such an approach seems inherently like disguised protectionism, despite
the other policy goals that have been put forward as part of the domestic procedure.
What is surprising about Rodrik's approach is that he seems to miss a somewhat
obvious alternative method of defining the scope of the trade regime so as to rein in the
 BOOK REVIEWS 415

impact on domestic policy-making. Another way to accomplish much of what he wants

to achieve is to focus trade rules on non-discrimination. There is much debate about
how to define non-discrimination (Ehring, 2002; Hudec, 1998; Porges and Trachtman,
2003), but however it is ultimately defined, a non-discrimination principle is one way
to establish the scope of the regime. Basically, this kind of regime would emphasize the
progressive liberalization of discriminatory trade measures, while continuing to allow
some such measures that are considered necessary for development or other social
purposes. Discriminatory measures that were permitted would be those taken through
the transparent mechanism of tariffs, rather than those hidden away in hard to discover
places in domestic laws and regulations.
To take a concrete example, recall Rodrik's suggestion that' [a] labor union may win
protection when its members are forced to compete against workers abroad who toil in
blatantly exploitative conditions' (p. 255). The problem, as noted above, is that this
kind of action is inherently contentious and makes trading partners suspicious. A 20 %
tariff suggests protection just as much as it does concerns about child labor. An
alternative here would be a non-discriminatory regulation that prohibits or labels
products based on their production process, including the type of labor used. This
would still be contentious, of course, but arguably it would be more defensible and
justifiable than a 20 % tariff. And, more importantly, if implemented properly, it could,
in theory, be done in a manner consistent with the current rules, with no changes to the
rules necessary.
Another example Rodrik puts forward on possible US responses to Indian child
labor also illustrates the missed opportunity related to the role of the non-dis-
crimination principle. He discusses the difference between (1) sanctions to promote
change to Indian policies and (2) blocking imports from India because such imports
constitute 'unfair competition' (pp. 242-243). The latter, he says, is defensible,
whereas the former is not. What Rodrik leaves out here is a fuller picture of this
story. The United States already has domestic regulations on child labor. As a
result, blocking imports is not quite what it sounds. Looked at as a whole, the US
regulation of this issue could be seen as a non -discriminatory regulation of a
particular aspect of production. Again, this is not to suggest that such regulation
would not be contentious. Regulations of this sort have been challenged at the
GATT/WTO on a number of occasions. But a strong argument can be made that
there is a fundamental difference, in legal terms, between slapping tariffs on imports
and applying a non-discriminatory regulation, and there is a good chance that the
latter would not be found in violation of the rules, if done properly. It is not clear
why he does not look to a non-discrimination standard as a possible resolution to
his concerns.
The result of the non-discrimination approach is that policy space would be ex-
panded considerably. Governments could pursue other policies to whatever extent they
wanted, as long as the measures used were not discriminatory. This should alleviate the
concerns expressed by Rodrik in many of his examples, such as the Hormones and
Biotech cases. It is easy to criticize WTO rules that require health measures to be 'based
on [a] scientific risk assessment', as Rodrik does (p. 80). But why not replace such rules
with a non-discrimination requirement? As Rodrik later notes, the Hormones and
Biotech measures were not discriminatory (pp. 196-197). Replacing the scientific basis
416 BOOK REVIEWS

requirement with a non-discrimination rule might be a better way to meet his objec-
tives than is his safeguard tariff proposal.
In addition, such an approach makes his trilemma - involving a tension between
globalization, democracy, and national self-determination - seem less problematic.
A non-discrimination principle can promote significant globalization without inter-
fering much in national, democratic affairs.
At one point, Rodrik acknowledges the point about non-discrimination, noting
that the GATT regime allowed countries 'to dance to their own tune as long as they
removed a number of border restrictions on trade and generally treated all their trade
partners equally' (p. 204). But this insight seems to get lost in the shuffle.
Along these same lines, Rodrik misses an opportunity to discuss some issues that one
would assume cause him great concern: investor-state dispute settlement and the
TRIPS Agreement. These issues are only mentioned briefly, and never really developed.
The problems with investor-state are much broader than the expropriation rules
he mentions (p. 197). There are also rules on the 'minimum standard of treatment',
performance requirements, and financial transfers. If he does not like the constraints of
the WTO, one would assume that he would be apoplectic about investor-state cases,
which can be brought directly by corporations without having to go through the
government. And the TRIPS Agreement is more than just the rules on patents and
copyright he mentions (pp. 78, 199). It would have been interesting to see Rodrik
explore why intellectual property rules are now included in the trade regime.
A final point relates to Rodrik's treatment of the issues of democracy, sovereignty,
and globalization. When reading this book, it is difficult not to think of Claude
Barfield's Free Trade, Democracy, and Sovereignty (Barfield, 2001). Like Barfield,
Rodrik is concerned about the constraints imposed by binding international trade rules
that have expanded beyond the traditional GATT subject areas, as well as the new,
more effective dispute settlement system of the WTO. Unlike Barfield, though, Rodrik
does not place much emphasis on 'sovereignty', and he seems to avoid the term for
the most part, often using substitutes. For example, he says that 'democracy and
national determination should trump hyperglobalization' (p. xix) and also refers
to 'national self-determination' (p. 200). Regardless of the terms used, though, the
fundamental concern seems to be the same. The difference is that Barfield did not want
to use that sovereignty/national determination to engage in industrial policy or trade
restrictions, as Rodrik does.
With regard to democracy, Rodrik explains that democratic governance is important
and in his chapter on principles he suggests that democracies should have an easier time
justifying their restrictive measures through a proper domestic political process
than would non-democracies (pp. 244-246). But there is an obvious problem here
which he does not acknowledge: China is not going to like the worse treatment of non-
democracies, and it may not be possible to have a trade regime without China. Rodrik
is certainly not alone in arguing for different treatment of democracies and non-
democracies. But in terms of coming up with a practical solution to the problems with
the current trade regime, this is a major stumbling block.
Ultimately, in my view, Rodrik's contributions to the globalization debate
are helpful, even for those who support most aspects of the current system. He puts
forward a thoughtful critique and offers concrete proposals for reform. It is good to be
 BOOK REVIEWS 417

able to question one's long-held beliefs, and Rodrik forces defenders of the regime to
do that. While his specific proposals may be impractical, he has identified some real
problems. In the end, these kinds of critiques of the trade regime should put it on a
firmer footing and make it stronger.
SIMON LESTER, Worldtradelaw.net

References
Barfield, Claude (2001), Free Trade, Sovereignty, Democracy: The Future of the World Trade
Organization,AEI Press.
Bown, Chad (2004), 'On the Economic Success of GATT/WTO Dispute Settlement', The Review of
Economics and Statistics, 86(3): 811-823.
Davey, William (2006), 'The WTO: Looking Forwards', Journal of InternationalEconomic Law, 9(1):
18-20.
Durling, James (2003), 'Deference, But Only When Due: WTO Review of Anti-Dumping Measures',
Journalof InternationalEconomic Law, 6(1): 125-153.
Ehring, Lothar (2002), 'De Facto Discrimination in World Trade Law: National and Most-Favoured-
Nation-Treatment or Equal Treatment?', Journal of World Trade, 36(5): 921-977.
Hudec, Robert (1993), Enforcing InternationalTrade Law: The Evolution of the Modern GATT Legal
System, Butterworth.
Hudec, Robert (1998), 'GATT/WTO Constraints on National Regulation: Requiem for An Aims and
Effects Test', The InternationalLawyer, 32: 619-649.
Posner, Eric and John Yoo (2005), 'Judicial Independence in International Tribunals', California Law
Review, 93(1): 46-51.
Rodrik, Dani (2007), 'How to Save Globalization from its Cheerleaders', September 2007, KSG Working
Paper No. RWP07-038.
Porges, Amelia andJoel Trachtman (2003), 'Robert Hudec and Domestic Regulation: The Resurrection of
"Aim and Effects"', Journal of World Trade, 37(4): 783-799.
WTO Tariff Profile of China, http://stat.wto.org/TariffProfile/WSDBTariffPFView.aspx?Language=E&
Country=CN
WTO Tarff Data for China, http://stat.wto.org/idbdata/idb chn last e.zip
WTO/ITC/UNCTAD, (World Tariff Profiles 2010.

doi:10.1017/S1474745611000243

The Political Economy of Agricultural Price Distortions

edited by Kym Anderson
Cambridge: Cambridge University Press, 2010

When presenting numerical calculations of welfare losses of the agricultural policy in

high-support countries, the same question always pops up: Why do the authorities
pursue this policy if the economic losses are so huge ? Are the calculations wrong? Do
they fail to capture public good benefits or non-economic societal gains of agricultural
policy? However, despite various limitations of numerical models, the documentation
in the academic literature is overwhelming: the agricultural policy involves high costs
in most countries, potential benefits are by far surpassed by the economic costs, and
more targeted policy instruments are usually available to provide farm related public
goods.