Rules, Policy and Rent Seeking: A Cross-border Comparison

The United States and Canada are similar in many ways, yet they have taken different approaches to agricultural policy. This paper discusses what affect the different constitutional arrangements have had on the development of agricultural policy. Constitutions can affect the policy bargaining process in several ways: they determine who has access to the bargaining process, what is the legal set of policy options and what is the admissible coalition. The two countries' Constitutions differ in where regions have access to the bargaining process, the use of the courts and the size of the admissible coalition. These differences have led to divergent policies, which are evidenced by the response to the recent drop in commodity prices.