Free-riding on rent seeking—an empirical analysis

The Common Agricultural Policy is modelled as a club good providing the European Union (EU) farmer with financial benefits. We build an economic model which explains how much farmers in individual EU countries invest in rent-seeking activities in order to test for free-riding behaviour on lobbying costs. For our investigation we group the EU member countries by farm structure, and the type of benefit received. We explain the fees paid by farmers for lobbying by other countries’ fees, political variables, and country and regional agricultural characteristics. The model shows that some member countries free ride on others suggesting a form of policy path dependency.