by Kate Hathaway and Dale Hathaway
This book explores the potential conflicts in one area of economic policy as the European Union enlarges to include countries of Central Europe that were from World War II until the 1990s a part of the communist bloc and governed by communist parties. The area of policy concern is agricultural policy, which for the countries in the European Union has been one of the most cohesive community-wide policies and is often referred to as the glue that holds the European Union together.
Beliefs and values
The approach used to examine the possible conflicts is to examine the beliefs and values held by policy leaders in Western Europe and in Central Europe on a series of issues considered to be basic to food, agricultural, and rural policies. The examination took place in a series of papers and commentaries on basic policy issues prepared by a group of distinguished scholars and policy makers from Western and Central Europe. The authors of these papers and commentaries then participated in a five day seminar in which the concepts and issues were examined in depth with special attention to how the beliefs and values differed or were similar from country to country.
In the context of this discussion a belief is defined as how persons think things are and a value is defined as how persons think things ought to be. Put differently, a belief is a perception of current reality and a value is a perception of how one would prefer current reality to be. The starting point of this examination of polices is the assertion that beliefs and values count in the process of building and maintaining functional policies. More will be said on the subject of how they count later in this chapter. It also was assumed that more than forty years of communist control of the countries of Central Europe had a profound impact on the beliefs and values of the people in those countries regarding food and agriculture. If so, these differences will lead to different policy pressures from those in Western Europe with its markedly different history.
Some persons argue that differences over agricultural policy are irrelevant insofar as enlargement of the EU is concerned to include countries of Central Europe. They assert that the overwhelming desire of the Central European countries to achieve the economic and political protection that membership in the EU affords is so great that they will accept whatever agricultural policies the EU demands for entry. This may be true, but it is not the end of the story. The modification of the Common Agricultural Policy (CAP) to accommodate the addition of countries with large agricultural sectors and many farmers is a certainty that has already begun in thought if not in action. Furthermore, as the discussions of the CAP later in this book point out, it is not a static policy and it will have to continue to be adjusted after the entry of the new countries in Central Europe. And, unless the EU substantially alters its decision-making structure the recent entrants will also play a significant role in determining future policies.
It should be noted that at least for the next quarter century the politicians and policy makers in Central European countries will be persons whose formative years were under the old communist systems. Thus, it seems important and useful to understand how those systems influenced the beliefs and values relating to a crucial policy area.
The role of beliefs and values in policy formation1
1 Much of the information in this section was taken from the original paper of Michel Petit as delivered at the Seminar on Beliefs and Values Underlying Agricultural Policies, Lake Balaton, Hungary, September 19-23, 1996.
In modem times, an early interpretation of the role of beliefs and values in government interventions was provided by one of the project leaders for this study, in his book published more than 30 years ago. 2 "Our government policies in agriculture represent an attempt to achieve, via government, certain widely-shared aspirations or values in our society."...
2 Dale E. Hathaway, Government and Agriculture - Public Policy in a Democratic Society, McMillan, New York. 1963.
"In order to understand fully the nature of the public policies, it is necessary to understand the ends that are sought via such actions or the aspirations that underlie them. This is particularly true in agricultural policy, for, as we shall see, these aspirations relate to fundamental issues regarding how society should be organized and the desirable relationships between men."
However, the author was ambiguous regarding how beliefs and values affect policies. The above quotation from his first chapter suggests that policies are indeed determined eventually by the maximisation of a social utility function. Yet, in the third part of the 1963 book, where the policy process is described and a model of policy behaviour is presented, the fact that different groups in society have different beliefs and values is explicitly recognised.
A discussion of political processes must contain some implicit model of political behaviour. The earlier discussion of values and beliefs has pointed out that various groups within and outside agriculture have sharply different beliefs and values regarding agriculture. The model of political behaviour used assumes that the primary function of the political process is the compromising of these conflicting or competing values and the discerning of the relevant beliefs in a fashion that maximizes the satisfaction of the relevant groups in society. Such a view of the political process is a rejection of the concept that it is essentially and largely a process which derives the 'national interest' or the 'public good.'
More recently, a group of American authors clearly inspired by Hathaway's concepts have produced an examination of current beliefs and values affecting agriculture in the US, entitled Sacred Cows and Hot Potatoes 3. It is interesting that the central perspective of these authors, as revealed by their subtitle, is to debunk myths affecting the agricultural policy debate in the United States: thus their intention is clearly normative. They want to correct what they view as mistakes and to promote a change in policies consistent with these corrections and with what they assert to be traditional, fundamental values. But they do not clearly spell out how modem policies that could respect such traditional values, as well as presumably better perceptions of the facts, i.e., better beliefs, could be designed.
3 W.P. Browne et al., Sacred Cows and Hot Potatoes - Agrarian Myths in Agricultural Policies, Westview Press, Boulder, 1992.
A very different approach stressing the positive analysis of why policies are and what they are is probably more useful. This approach is very much inspired by the new political economy of such authors as Downs, Buchanan, Kruger, Olson, Stigler, etc. This literature, of the late 1960s and mainly 1970s, was not available when the Hathaway book was written in the early 1960s, but he clearly was a precursor of the new political economy, as argued earlier. 4 Many of the intuitions in the third part of his book on the policy process fit very well with the new political economy literature, which is based in particular on a model of policy behaviour which assumes that policy actors seek not the public good but then-own interests.
4 M. Petit, "For an Analytical Political Economy: Relevance to the Study of Domestic and International Agricultural Trade Policies," Paper presented at the Theodor Heidhues Memorial Seminar, Göttingen, Federal Republic of Germany, 1980.
If, as suggested elsewhere, economic interests shaped by long-term economic forces, are the main determinant of policies, 5 is there any role for beliefs and values in the policy making process? Obviously beliefs and values have an important role to play, but the mechanism and the specific details of how that role is being played remains to be specified. One interpretation is that beliefs and values play a role at two levels.
5 M. Petit et al., Agricultural Policy Formation in the European Community: The Birth of Milk Quotas and Cap Reform, Developments in Agricultural Economics 4, Elsevier, 1987.
First, they contribute to shaping the groups which become policy actors. Individuals do not have enough weight in the policy making process. To be influential, collective action is needed, but collective action requires the existence of collective actors. Individual actors will tend to join groups or to form groups with other individuals having the same interests. However, economic interests are extremely varied and never completely homogeneous. As a result collective action is never straightforward. The conditions and pitfalls for such collective actions have been well studied by Olson (1965). People sharing broadly common interests tend to have similar beliefs and values, and they form collective actors. One can assume that these common beliefs and values are important too for the cohesion of the collective actors.
The second role of beliefs and values is related to the fact that in any policy making process all the actors do not play equal roles. In particular, one puzzle raised by agricultural policy in many OECD countries is that consumers and tax payers do not seem to exert the influence which their interest and numbers would warrant. A commonly accepted explanation for this paradox has to do with the cost of information. For individual consumers to get organized collectively and become influential would entail costs for getting informed, active and influential on agricultural policy issues, which are not warranted by the benefits they would gain. So even though consumers are more numerous than farmers, they do not exert a great weight. For farmers the reverse is true. Indeed they have formed powerful organizations, and they have much greater influence than consumers on agricultural policies in Western Europe, as well as in other OECD countries.
In this context, a plausible hypothesis for the role of beliefs and values could be that consumers and tax payers, often the same people, i.e., the public at large, will tolerate a sectoral policy which may not serve their best interest, if that policy is not in too sharp a contrast with what they believe to be the situation of farmers and what they value as fair for the place of farmers in society. For instance, there is little doubt that in the USA the idea that family farms need to be protected has played an important role in maintaining agricultural policies which did not serve the best interest of consumers and tax payers. Whether or not the adopted policies actually protect family farms was not relevant as long as they were perceived to do so better than possible alternative policies.
Similarly, in Western Europe, the ideas that farmers are hard working, that they have made valiant efforts for adapting to new techniques and that, even though they are hardworking, they are not very well paid, and therefore deserve a special treatment, is very widely held. This set of beliefs and values commonly held in the public at large, as demonstrated by repeated opinion polls, has presumably played an important role in explaining why the Common Agricultural Policy has been so much tilted in favour of farmers against the interests of consumers and tax payers. So in the context of a pluralist society, where policies are the result of an evolving debate among various groups, social beliefs and values play an important role in determining what will be acceptable by society at large.
Whatever the explanatory model one accepts eventually, everybody agrees that beliefs and values are important. There is also widespread agreement on the fact that those beliefs and values change through time and that it is important to take into account the historical process of policy formation and evolution if one wants to provide meaningful explanations and be able, on the basis of these explanations, to predict something about the future. This consensus thus justifies the outline for this paper.
In the chapters that follow it is clear that nearly half a century of communist political and economic organization have left an indelible mark on the beliefs and values of persons in Central Europe. These appear to show up most sharply in different views relating to the role of agriculture in the economy and society, views on desired economic structure, and the belief that trade policy should be an extension of domestic price and income policy. The countries of Central Europe appear to be searching for an income policy for farmers, and it appears uncertain whether income policies will take the same direction as they have in the EU. On the issues of rural environment there are similar values as to the desired objectives, but the political dynamics relating to environmental issues appear markedly different. Because of the decades of communist neglect of rural areas, the former communist countries appear to have a higher priority on rural development than some of the countries in the EU. In the case of food safety there appears to be a universal sharing of the desire for safe food supplies, and Central European countries are keenly aware that in order to compete in the markets in Western Europe, their products must meet high quality standards.
This book is not an attempt to suggest how the integration of Central Europe into the EU will evolve. It does, however, look at the policies of a key sector and suggest where in one way or another political and economic adjustments may be required.
