Abstract
This paper analyses the effects of food price shocks on selected disaggregated human development indicators and investigates the role of openness policy in mitigating the adverse effects of large changes in food prices. Using a panel of 74 developing countries from 1980 to 2012, I find that positive food price shocks reduce life expectancy at birth both in the fixed-effect model and in the dynamic panel model while negative food price shocks do not seem to matter for this human development indicator in the static model but adversely affect it in the dynamic model. I also find that both positive and negative shocks have no effect on youth literacy rate; this probably means that households do not react to food price shocks by taking children out of school. Analysing the role of commercial openness, I find that openness policy enhances countries’ capacity to manage the adverse effects of food price shocks on life expectancy at birth. This suggests that the tempting policy option of reducing openness to trade during food price shocks is not an efficient choice as regards the human development. Countries must therefore set institutional arrangements that could prevent policy-makers from taking this inefficient policy option.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: The Journal of International Trade & Economic Development
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
