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Does food aid depress food production? The disincentive dilemma in the African context

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  • Lavy, Victor

Abstract

Food aid averages only ten percent of total financial aid to developing countries, but in certain African countries - Botswana, Cape Verde, Mauritius, and Mauritania - it represents more than half the food available for consumption. The author applies vector auto-regression (VAR) analysis to data for sub-Saharan Africa to test these hypotheses. The issue is not whether food aid is good or bad but how it can be used to promote economic development and improve the nutrition of the food-insecure. The author found that food aid has a significant positive effect on food production. Any disincentive induced by the additional supply of food is offset by the positive effects. Food aid is also more likely to have a positive effect in countries that use fertilizer intensively. One possible explanation for this is that countries that enjoy a relative abundance of regular food aid can use the resources made available through reduced food imports to invest more in the agricultural sector - which is more likely when such an investment is a condition imposed by the aid donors.

Suggested Citation

  • Lavy, Victor, 1990. "Does food aid depress food production? The disincentive dilemma in the African context," Policy Research Working Paper Series 460, The World Bank.
  • Handle: RePEc:wbk:wbrwps:460
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    References listed on IDEAS

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    1. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1989. "The Revenues-Expenditures Nexus: Evidence from Local Government Data," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(2), pages 415-429, May.
    2. Lavy, Victor, 1990. "Alleviating transitory food crisis in Africa : international altruism and trade," Policy Research Working Paper Series 494, The World Bank.
    3. Srinivasan, T N, 1989. "Food Aid: A Cause of Development Failure or an Instrument for Success?," World Bank Economic Review, World Bank Group, vol. 3(1), pages 39-65, January.
    4. Dudley, Leonard & Sandilands, Roger J, 1975. " The Side Effects of Foreign Aid: The Case of Public Law 480 Wheat in Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 23(2), pages 325-336, January.
    5. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
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    Citations

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    Cited by:

    1. Erwin H Tiongson & Benedict J. Clements & Sanjeev Gupta, 2003. "Foreign Aid and Consumption Smoothing; Evidence From Global Food Aid," IMF Working Papers 03/40, International Monetary Fund.
    2. Donovan, Cynthia & McGlinchy, Megan & Staatz, John M. & Tschirley, David L., 2006. "Emergency Needs Assessments and the Impact of Food Aid on Local Markets," Food Security International Development Working Papers 54566, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. Bezu, Sosina & Holden, Stein, 2008. "Can food-for-work encourage agricultural production?," Food Policy, Elsevier, vol. 33(6), pages 541-549, December.
    4. Abdulai, Awudu & Barrett, Christopher B. & Hazell, Peter, 2004. "Food aid for market development in Sub-Saharan Africa," DSGD discussion papers 5, International Food Policy Research Institute (IFPRI).
    5. Lavy, Victor, 1990. "Alleviating transitory food crisis in Africa : international altruism and trade," Policy Research Working Paper Series 494, The World Bank.
    6. Gebremedhin, Berhanu & Swinton, Scott M., 2001. "Reconciling food-for-work project feasibility with food aid targeting in Tigray, Ethiopia," Food Policy, Elsevier, vol. 26(1), pages 85-95, February.
    7. repec:bla:rdevec:v:21:y:2017:i:4:p:1380-1400 is not listed on IDEAS
    8. Kiawu, James & Jones, Keithly G, 2013. "Implications of food aid and remittances for West African food import demand," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(1), July.
    9. Lowder, Sarah K. & Southgate, Douglas & Rodriguez-Meza, Jorge, 2004. "A Post Schultzian View Of Food Aid, Trade And Developing Country Cereal Production: Results Of A Vector Autoregression On Panel Data Using Fixed Effects," 2004 Annual meeting, August 1-4, Denver, CO 19919, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Barrett, Christopher B., 2002. "Food Aid And Commercial International Food Trade," Working Papers 14742, Cornell University, Department of Applied Economics and Management.
    11. Mabuza, Majola Lawrence & Hendriks, Sheryl L. & Ortmann, Gerald F. & Sithole, M.M., 2009. "The impact of food aid on maize prices and production in Swaziland," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(1), March.

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