Sun 23 Sep 2012
In my previous post, I objected to the way in which Tyler Cowen’s recent NYT blog post pushed the dominant “crisis of production” narrative in discussions of food security. In my opinion, the recurrence of this problematic claim in various popular outlets has a lot to do with people’s relatively surficial understanding of food security and the causes of hunger in the Global South. For some reason, development seems to lend itself to dilettantism…at least in part, I suspect, because people assume that the global poor are so bad off that any new ideas would be an improvement on what is there. Of course, there is also the subtle, durable assumption that poor people (especially of darker skin tones) somehow (re)produce their problems because they don’t think rationally/clearly/etc*. Such arguments fall apart when they are tested with actual evidence, but most op-eds and policies have nothing to do with evidence…
This problem extends beyond how we talk about the poor themselves to how we think about the governments under which they live. While governance (not the same as government, folks – please try to remember this) is really important to development outcomes, it is not everything…and government (as in the formal rules and structures of governance in a particular place) can be even less important, as many of the global poor live beyond the reach of the state. So blaming the state and its policies for hunger can be a pretty tricky proposition. When Cowen, in an offhand way, wades into the role of the Malawian government as an illustration of how his presumed production shortfalls are exacerbated by problematic government policies, his lack of understanding of the African context becomes clear:
many African nations have unhelpful policies toward agriculture. Malawi, for instance, subjects corn to periodic export and import restrictions as well as to price controls, all of which thwart development of a well-functioning market. When market speculators save corn in anticipation of greater scarcity, they may be punished by law. These restrictions of market incentives exacerbate the basic supply problems.
First, Cowen cherry-picks Malawian government actions to make this point. While price controls and import/export restrictions have been used, there is another side to Malawian intervention in the markets: the subsidization of inputs to boost overall farm productivity. As a result, he ignores the near-perfect correlation between the years when the government intervenes in input markets – effectively, when the Malawian government subsidizes fertilizers – and the years when Malawi is a net food exporter to the extent that it can pay for the entire subsidy several times over (this correlation has proven very durable and very vexatious to some of the more theologically-inclined free marketeers out there). In the case of Malawi, some market intervention, however distortionary, actually does work to ensure adequate food production within the country each year. Which gets to a much larger point: the Malawian government is doing this not out of ignorance or irrationality, but because it is being responsive to citizens whose short term needs are so dire that to take a long-term only view would result in mass morbidity, if not mortality, in the short run.
For example, in a priori assuming that Malawi’s decision to punish market speculators when they “save corn in anticipation of greater scarcity” (one person’s “saving” is another’s “hoarding”), Cowen fails to parse between the needs of an efficient market (a means of transmitting future price situations into current pricing decisions) with human needs (a means of obtaining adequate food such that members of the household do not die) – in most places I work, there is a large disjoint between the two. It is this disjoint that the government of Malawi, and indeed many governments around the world must negotiate. It is this disjoint, and its attendant reality, that is Cowen’s second major problem, as he doesn’t really understand it. This reality has two parts:
1) Yes, in the long run markets can transmit information about pricing and preferences that can lead to more productive and useful decisions, but in contexts where people are living on a dollar a day, their margins for error are small and their ability to wait for markets to work things out is limited.
2) There is a presumption that the anticipatory price signal will result in actions to address the problem before the shortage actually hits. However, the causes of shortage generally extend well beyond the management capacity of any single state. In short, transmitting shortage signals into the present only serves to prolong the challenges that the Malawian poor are going to face, without producing any effective policy or market response because there is no government capacity to respond. In short, why transmit the emergency into the present when you are going to need help to address it now or in the future? This is why many African states punish hoarding…though they could be looked upon as comprising a de facto futures market, hoarders transmit not just information, but shortage into the market and onto very vulnerable populations earlier than would otherwise be the case, undermining safety and security sooner and to no good end. Given the option of an efficient market populated by a lot of dead people and an inefficient, or even broken market populated by live people, most African states are going with the latter. Until someone sorts out how to set up functioning markets near-instantly, builds enough financial resilience into African livelihoods to weather this sort of market behavior, or builds the financial and infrastructural capacity of African states to a point they can manage this short of shock without external assistance (or some combination of the three), states will continue to be forced into this sort of decision, and will make the same choice. I am not convinced that the manipulation/corruption of markets Cowen describes is a cause of hunger as much as a symptom of a hugely problematic global political economy that no one small country can effectively manage.
In short, the situation in Malawi is very common in sub-Saharan Africa. For most countries, the issues I raise above have been in play since independence. The typical African country is dealing with a set of pressures that make straightforward economic decision-making nearly impossible – from state-building to market-building, these countries cannot just make economic decisions, they must make political-economic decisions that reflect the immediate reality around them. Government is easy…until you actually have to govern.
*This is not to absolve all poor people of all responsibility for their situations. The global poor, like everyone else, are human – they are subject to emotions, biases, prejudices, etc. that sometimes do cause major problems for their well-being. However, it has been my experience that this is not a dominant cause of the problems of poverty…mainly because if these problems were exacerbated more than they were helped by the efforts of the global poor, we’d have a lot fewer poor people because they would mostly have died. The global poor make fantastically difficult decisions about the allocation of scarce resources every day with a shocking degree of success…something we overlook at our peril.