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Wars, foodcost and countervailing policies: A panel data approach

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  • Ali, Hamid E.
  • Lin, Eric S.

Abstract

Withholding food or providing it during a conflict is vital for peace missions and challenges for building sustainable peace. The purpose of this paper is to introduce a new perspective in considering the impact of wars on relative wages in the food sector. We define the foodcost as the share of wages paid to the food sector versus total manufacturing wages. We try to estimate the effect of two types of wars (namely, civil and international wars) on the foodcost and explore the policies that are likely to reduce that cost. We use panel data for 41 countries from 1960 to 1999 to answer these questions. The empirical results show that civil wars positively affect the foodcost, while international wars apparently do not. The policy implication of this analysis is that, in the event of a civil war, policy-makers lack the resources to exert control on a rising foodcost. A rise in the foodcost could be translated into higher food prices or lower purchasing power over food, either of which may have devastating impacts on social and economic well-being. In the event of an international war, as opposed to a civil war, governments have a greater capacity to prioritize and mobilize resources. Therefore, the impact of an international war on the foodcost is positive but weak. The foreign aid remains an effective countervailing tool for reducing the increase in the foodcost.

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Bibliographic Info

Article provided by Elsevier in its journal Food Policy.

Volume (Year): 35 (2010)
Issue (Month): 5 (October)
Pages: 378-390

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Handle: RePEc:eee:jfpoli:v:35:y:2010:i:5:p:378-390

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Web page: http://www.elsevier.com/locate/foodpol

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Keywords: Food policy Civil war International war;

References

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  1. Singer, H. W., 1989. "The African food crisis and the role of food aid," Food Policy, Elsevier, vol. 14(3), pages 196-206, August.
  2. Food Security Unit, 1992. "Understanding famine in Africa," Food Policy, Elsevier, vol. 17(1), pages 83-86, February.
  3. Handy Williamson, 2001. "Globalization and Poverty: Lessons from the Theory and Practice of Food Security: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 730-732.
  4. Paolo Figini & Holger Görg, 2007. "Does foreign direct investment affect wage inequality? An empirical investigation," The Institute for International Integration Studies Discussion Paper Series iiisdp186, IIIS.
  5. Paul Collier & V. L. Elliott & Håvard Hegre & Anke Hoeffler & Marta Reynal-Querol & Nicholas Sambanis, 2003. "Breaking the Conflict Trap : Civil War and Development Policy," World Bank Publications, The World Bank, number 13938, October.
  6. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
  7. Daymon, Caroline & Gimet, Celine, 2009. "An empirical test of the inequality trap concept," Economics Letters, Elsevier, vol. 105(2), pages 165-167, November.
  8. Paul Collier & Anke Hoeffler, 2000. "Greed and Grievance in Civil War," CSAE Working Paper Series 2000-18, Centre for the Study of African Economies, University of Oxford.
  9. del Ninno, Carlo & Dorosh, Paul A. & Subbarao, Kalanidhi, 2007. "Food aid, domestic policy and food security: Contrasting experiences from South Asia and sub-Saharan Africa," Food Policy, Elsevier, vol. 32(4), pages 413-435, August.
  10. Sen, Amartya, 1981. "Ingredients of Famine Analysis: Availability and Entitlements," The Quarterly Journal of Economics, MIT Press, vol. 96(3), pages 433-64, August.
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