Policy Approaches to
Undernutrition
Text adapted from
The World Food Problem
Leathers and Foster, 2009
http://www.amazon.com/World-Food-ProblemToward-Undernutrition/dp/1588266389
Ethics: Pope John Paul II
• “Contrasts between poverty
and wealth are intolerable
for humanity”
• “It is the task of nations,
their leaders, their economic
powers and all people of
goodwill
• to seek every opportunity for
a more equitable sharing of
resources”
– Example of Beneficence
• Personal moral duty to help
the poor
http://schoolnet.gov.mt/liceovassalli/mav/MAV%20Zones/Students/Essays/Pope%20John%20Paul%20II.jpg
Ethics: Right to Food?
• Right to Food
– Included in International
Covenant on Economic, Social
and Cultural Rights
– Adopted by UN
– Signed by 85 countries
• Now must address hunger
issue
United Nations
http://orrinwoodward.blogharbor.com/United%20Nations%20Assembly.jpg
– to protect fundamental rights
of society
– Don’t need to feel personal
moral duty to help the poor
Ethics: Right to Food?
• Rights taken very
•
•
•
•
Feeding orphans, Yemen
http://www.yobserver.com/uploads/1/orphans5.jpg
seriously
Absolute entitlement
Non-negotiable
Would require
government to act to
prevent hunger
Conflict with property
rights?
Economist’s Questions
• What is the
appropriate policy for
society as a whole?
• How can government
best manipulate
human greed to
achieve its policy
objectives?
http://neweconomist.blogs.com/photos/uncategorized/20061110_inside_the_economists_mind_cove.gif
How to Move Society Forward
Economists give
advise on how
to do this
Government
Manipulate self-interest
to achieve policy goals
Economy
Capitalism
Ideology
Self-interest
Economics Policy Decisions
• Every action has costs and
benefits
• Marginal costs and benefits
– For 1% increase in cost, what is the
increase in benefits?
• Ideal decision: where marginal
costs = marginal benefits
• Free market will allocate
resources optimally, but
Three Gorges Dam, China
http://www.thelightisgreen.com/China%20Three%20Gorges%20Dam%2001.jpg
– Without concern for
• Social costs
• Environmental costs
– Can everything be put in dollar
terms?
Externalities
• Costs and benefits
sometimes go to people
outside the market
transaction
– Should wealthy benefit
from costs borne
• By the poor?
• By the environment?
http://wheresmyamerica.files.wordpress.com/2007/08/smoke-stack1.jpg
Every action has costs and benefits
• How much would you pay for…
– A human life?
• Speed limit 10 MPH?
• Nutrition for every man, woman,
and child?
–
–
–
–
http://www.superkidsnutrition.com/app_themes/sba_nutrition/images/NA_ProtectSelfFromPesticides.jpg
Food without pesticide residue?
No pollution?
Freedom?
Fair trade?
Harnessing greed in policy
• Economic incentives
– Can make it more expensive
• To have children
• To degrade the environment
– Need property rights
• Production increases with reward
– If we eat less:
• other countries won’t benefit
• Farmers will produce less
• As demand increases
– efficiency increases
• Products made available more cheaply
• Alternatives found
http://sheepwaker.tripod.com/greed.jpg
Policy to reduce undernutrition?
• 250 Calories/day would
erase Calorie deficit of
hungry
– Cost 35 cents/day/person
– = $6,400 invested at 2%
interest
– Value of Human Life?
• For 800 million people,
this policy would
– Increase food prices
– Increase environmental
costs of food production
http://www.pbs.org/newshour/images/africa/july-dec07/1126_somalia_bhead2.jpg
Policies to raise incomes of poor
• Redistribute income from
rich to poor
– Rationale: declining
marginal utility of income
• Rich don’t benefit from a
dollar spent as much as
poor do
– But should incomes be
equalized?
• Improve rate of economic
growth
http://www.alliance2015.org/var/news/storage/images/galleries/world_poverty_map/245
2-1-eng-GB/world_poverty_map.jpg
– Is Globalization beneficial
to developing nations?
Policies to reduce price of food
• Population reduction
– Demand will rise
slower
– Food prices will rise
slower
• Increasing supply
– Research investment
– Loans to farmers
http://farm3.static.flickr.com/2300/2198720003_b56c80b97c_o.jpg
Policies to reduce cost of food
• Price supports
• Sell food to consumers
• Subsidies to farmers
– Both reduce economic
efficiency
– Therefore distortionary
• Corrective price policies
– Example: correcting
distortions that reduce food
output
– Example: To feed hungry has
indirect benefit to wealthy
• We feel better = externality
• No market for this
Aid Policies
• Aid can help
– If targeted to poor
• Example: School feeding
– In emergencies
• Aid can hurt
– If wealthy elites profit from it
• makes the problem worse
• Often designed to further our
national and trade interests
• Directed mainly at political
allies
– not hungry nations
http://www.bread.org/assets/images/learn/food-aid.jpg
http://static.flickr.com/51/189662626_257b15004f_o.jpg
Aid Policies
• Have been used as a lever
– to impose “structural adjustment”
on foreign trade policies
• If foreign countries do not open
up markets
– or reduce subsidies as directed by
U.S.
• Aid may stop
• Designed to create new markets
– foster dependence on U.S. grain
• Korea
http://ecx.images-amazon.com/images/I/5111439M5NL._SL500_AA240_.jpg
Aid Policies
• When aid is given as free
grain
– undermines prices for farmers
– driving them out of business
• Military aid can lead to
armed conflicts
– that generate hungry people
• Well-off divert aid to help
themselves
http://www.wfp.org/img/newsroom/afghanistan/310/dscn0678.jpg
– further widening gap between
haves and have-nots
U.S.Agency for International
Development (USAID)
• Started with Marshall Plan after
WWII
• Principal U.S. foreign aid
agency to help countries:
USAID in Uganda
– Recover from disaster
– Escape poverty
– Democratic reforms
• Partnership with
– 3,500 U.S. businesses
– 3,000 Organizations
• $8.8 Billion
U.S. Foreign Aid
• U.S. gave $28 billion
(2007)
• Largest Donor in world
• Less generous based on
capacity to give (GNP)
• < 0.22% Federal Budget
– Majority think U.S.
Aid is 20X more
http://news.bbc.co.uk/nol/shared/spl/hi/pop_ups/05/business_aid_and_development/img/1.jpg
U.S. Foreign Aid Spending
2009
U.S. Foreign Aid Budget
http://farm3.static.flickr.com/2389/2429946098_2f24950561.jpg
Third World Debt
• Forgiving third-world debt
– would help countries become
self-sufficient
• Honduras annual debt
payments
– exceed amount spent on health
and education combined
• Total debt payments
– greater than foreign aid and
foreign investment combined
http://bloodbankers.typepad.com/submerging_markets/chart_intro.1.%20Growth%20of%20the%20Debt.jpg
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