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Category: Policy

Published March 3, 2011

Incentive and Crowding Out Effects of Food Assistance

That’s the title of a new working paper by Munshi Sulaiman, a student at the the London School of Economics, who runs a randomized controlled trial to evaluate the impacts of food assistance in a post-conflict area:

“Food assistance is one of the most common forms of safety net programs in postconflict situations. Besides the humanitarian and promotional roles, there are widespread scepticisms of food assistance regarding its possible influence on disincentive to work and on crowding out of private transfers. While there is a relatively large amount of empirical research on social protection in stable context, it is less researched in post-conflict situations. Based on randomized evaluation of a food-for-training program implemented in Southern Sudan, this paper estimates these effects. We observe a significant negative impact (about 13 per cent) on per capita household income. However, there is no effect on the hours of work or the type of the economic activities of the adult members. The decline in income mostly happened through a reduction in child labor. There is also a positive effect on school enrolment for girls (about 10 percentage points) and an improvement in their housing status. We also do not find any indication of crowding out of private transfers for the participants. This is most likely due to the extent of private transfers being very low to begin with. However, there is a small but significant impact of the transfers given out by the participants.”

In other words, on the positive front, food assistance increases the likelihood that girls within the household are enrolled in school, it increases the quality of the household’s dwelling, it does not reduce the private transfers received by the households, as has often been posited, and it increases the transfers made by the household to others.

On the negative front, food assistance does cause a decrease in household income, but it does so through a reduction in child labor so that depending on your preferences, you may interpret this as good news.

(HT: RepEc’s NEP-DEV listserv.)

Published March 2, 2011

Secretive Talks Over Redefining Food Aid

From an article in The Globe and Mail earlier this week:

“For the first time in more than a decade, an elite compact of the world’s richest nations will begin redrawing the historic international agreement that governs food-aid commitments to hungry countries.

Canada, as chair of the talks, is uniquely poised to shape the secretive negotiations, which are held behind closed doors in London at quite a distance from the Rome-based nerve center of global food politics.

The treaty, called the Food Aid Convention, is so political that its signatories – including the United States, the European Union and Japan – have been unable to agree on updated terms since 1999. Their unwillingness to modernize the agreement has caused what could be one of the most important tools in the battle against global hunger to become ineffective and nearly invisible; it has also stalled several new countries from writing their food-aid commitments into the pledge.

The timing couldn’t be worse: The food-aid sector is suffering from chronic fragmentation – the responsibility for feeding the world’s hungry is shared by a handful of overlapping humanitarian organizations with varying degrees of effectiveness – and panic is escalating over how to feed the one-billion-plus people in need of more food; unrelenting volatility has seized commodity markets; and food security is looming ever-larger on the global agenda, including that of the G20, as its connection to climate change, development and political instability grows clearer.”

Even as a food policy economist, I learned quite a bit from the article.

(HT: Chad Shipmaker.)