Food prices and politics: the IMF agrees with Bob Marley
March 31, 2011
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
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?