Hans Rosling and co on Water – justice, development and liberation through washing machines

March 31, 2011

CGD apologizes; agonizing and proverbs on aid; UN April Fool; what the G20 should do on food prices; climate and populism; can Africa do industrial policy? Links I liked

March 31, 2011

Food prices and politics: the IMF agrees with Bob Marley

March 31, 2011
empty image
empty image

I usually prefer ‘man bites dog’ research that comes up with unexpected answers, but sometimes it’s helpful to have the opposite – number crunchers who back up what you always suspected, thereby increasing your certainty and confidence. Food Prices and Political Instability, a new paper from the IMF, is in the latter category. Some highlights, with an executive summary c/o Bob Marley’s classic, ‘Them Belly Full‘:

“In Low Income Countries increases in the international food prices lead to a significant deterioration of democratic

Evidence-based food riot in Mozambique

Evidence-based food riot in Mozambique

institutions and a significant increase in the incidence of anti-government demonstrations, riots, and civil conflict. In the High Income Countries variations in the international food prices have no significant effects on democratic institutions and measures of intra-state conflict.”

[BM: ‘Cost of livin’ gets so high,
Rich and poor they start to cry:
Now the weak must get strong;
They say, “Oh, what a tribulation!”]

“We examined in this paper empirically the effects that changes in the international food prices have on measures of democracy and intra-state stability in a panel of over 120 countries during the period 1970-2007. Our main finding was that during times of international food price increases political institutions in Low Income Countries significantly deteriorated. To explain this finding we documented that food price increases in Low Income Countries significantly increased the likelihood of civil conflict and other forms of civil strife, such as anti-government demonstrations and riots.

[BM: ‘A hungry mob is an angry mob’]

Increases in the international food prices had real macroeconomic effects that went beyond average per capita income: they were associated with a significant decrease in consumption and a significant increase in the gap between rich and poor.

[BM: ‘Them belly full but we hungry’]

All in all, our empirical results are broadly consistent with the often made claim by policy makers and the press that food price increases put at stake the socio-economic and political stability of the world’s poorest countries.”

So people riot when food prices go up. And the effect is bigger in poor countries, where food can constitute 80% of a household’s expenditure. Well duh. But still, now we know that it’s true (because the IMF says so). And that Bob Marley was right (and Chris Blattman wrong).

So if food price spikes punish poor people and lead to political instability, what should we be doing about them? That conversation is, I think, is for another day, but if you want to kick it off, feel free.

Meanwhile, here’s the man himself, summarizing the research (but losing it a bit towards the end….)

Update: The Spanish Inquisition over at Aid Thoughts reckon that the numbers in the paper don’t warrant the strength of the IMF/my conclusions, but chief Inquisitor Matt admits he commented in a rush and may have missed something. Any data monkeys out there want to check?

9 comments

  1. Good old IMF, and yes, sometimes conventional wisdom is right. We can also see it in events like the French Revolution; there were poor harvests and severe food shortages leading up to the revolution. The price of bread rose by over 60% in 1789.

    Some say it was caused by an Icelandic volcano, well at least that wouldn’t happen again, would it?

    “How many rivers do we have to cross,
    Before we can talk to the boss? Eh!
    All that we got, it seems we have lost;
    We must have really paid the cost.” [Burnin’ an Lootin’]

  2. The two reported figures suggest that it’s modelled as a linear relationship based on the total N.

    I don’t have time to look at the report (and appendixes – probably) but can anyone confirm that?

    If so, someone should probably try look for threshold effects. Anything else is ludicrous.

  3. We concentrate to often on statistics & numbers to identify a reason – how about that the riots occurred because there is a government that has lost its ability to talk to “the people”. Frustration breeds anger, anger boils into riots. It takes a little spark….not increased food prices only, but a combination of poor government, a lack of empathy & a battle to survive that affect poor people.

  4. @Justgowl: don’t really agree, people don’t march for want of empathy (‘What do we want?’ ’empathy!'; ‘When do we want it?'; ‘As soon as you’re in the mood!’).
    It takes a lot to get people marching and angry en masse – just look at UK students, they should have been out there ages ago, putting the world to rights over Iraq, environment, bankers etc.. But it was only when their grants were cut that they managed to tear themselves away from their laptops and make a fuss.

  5. this could inspire a long theme! brilliant blog.

    try this for size, financial crisis by the silvertones

    http://www.youtube.com/watch?v=DUsKl-Of8uI

    ‘it seems the time is at hand, financial crisis

    and burning spear- can’t get no food to eat, can’t get no money to spend.

    http://www.youtube.com/watch?v=-mWNi7u9OLY&feature=fvst

    and could this lead to police and thieves on the street

    http://www.youtube.com/watch?v=WQriZQbTcjk

    and i think we can safely say no that the deadline has passed on this one-

    http://www.youtube.com/watch?v=QT6i0P1lOj4

Leave a comment

Translate »