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Abstract
This paper empirically investigates the interaction of formal and informal political
institutions as well as lobbying in determining the ability of agriculture to avoid
taxation or attract government transfers. Based on our theory we identify specific
interaction effects between district size and characteristic political as well as demographic
framework constellation, that determine two different regimes, e.g. an
u-shape and an inverse u-shape relation between district size and the level of agricultural
protection. Further, our theory implies specific different patterns of how these
interaction effects impact on agricultural protection levels in developing and industrialized
countries. Using time-series-cross-section (TSCS) data, this paper tackles
the quantitative assessment of the theoretical implications. We estimate the latent
regime of agricultural protection and assess the opposing quantitative relationships.
We check our results for robustness concerning dynamic specification issues and latent
heterogeneity. Furthermore we gauge the possible endogeneity of institutions
via an extended treatment framework.