The Economics of Global Food Security
by
Luther Tweeten*
The Setting
Food security is commonly defined as access by all people at all times to sufficient food to meet dietary needs for a productive and healthy life (USAID). The world is reducing chronic food insecurity or undernourishment, but major challenges lie ahead.
Numbers of undernourished people in developing countries fell from 917 million in 1969–71 to 839 million in 1990–92 and are projected to fall to 680 million in 2010 according to FAO estimates (Table 1). The spectacular 207 million reduction in East and Southeast Asia more than offsets the 112 million addition to the number of undernourished people in Sub-Saharan Africa between 1969–71 and 1990–92.
Asia and Africa had somewhat comparable incidence of undernourishment in 1969–71, and two regions—South Asia and East and Southeast Asia—each had greater numbers of undernourished people than Sub-Saharan Africa through 1990–92. However, by 2010 FAO predicts that Sub-Saharan Africa will have more undernourished people than either Asian region in Table 1 and its incidence of undernourishment (30 percent) will be about triple that of Asian regions.
Table 1. Actual and Projected Undernutrition in Developing Countries.
|
Actual |
Projected |
||||||
|
Country |
1969–71 |
1979–81 |
1990–92 |
2010 |
|||
|
——————— million persons ——————— |
|||||||
|
(percent of region total) |
|||||||
|
Latin America and the Caribbean |
53 (19) |
48 (14) |
64 (15) |
40 (7) |
|||
|
South Asia |
238 (33) |
303 (34) |
255 (22) |
200 (12) |
|||
|
East and Southeast Asia |
475 (41) |
378 (27) |
268 (16) |
123 (6) |
|||
|
Near East and North Africa |
48 (27) |
27 (12) |
37 (12) |
53 (10) |
|||
|
Sub-Saharan Africa |
103 (38) |
148 (41) |
215 (43) |
264 (30) |
|||
|
TOTAL, developing countries |
917 (35) |
904 (28) |
839 (21) |
680 (12) |
|||
Source: FAO 1996a.
Per capita dietary energy supply (DES) increased 0.52 percent per year for the world and by even more (0.78 percent per year) in developing countries between 1969–71 and 1990–92 (Table 2). Progress is expected to slow—FAO predicts DES will increase only 0.33 percent annually from 1990–92 to year 2010.
One region of the world, Sub-Saharan Africa, seems to be losing the capacity to feed itself. The International Food Policy Research Institute (Rosegrant, et al., p. 15) projects that the region’s imports of all cereals will grow from 9.4 million metric tons (mmt) in 1990 to 26.1 mmt by 2020. Paying for such imports will be a major challenge.
Table 2. Average Per Capita Dietary Energy Supply.
|
Actual |
Projected |
|||
|
Classification |
1969–71 |
1990–92 |
2010 |
|
|
———— calories (output)/day ———— |
||||
|
(annual % increase from previous period) |
||||
|
Developed countries |
3190 |
3320 (0.23) |
3390 (0.06) |
|
|
Developing countries |
2140 |
2520 (0.78) |
2770 (0.50) |
|
|
World |
2440 |
2720 (0.52) |
2900 (0.33) |
|
Source: FAO 1996b, p. 2.
This paper outlines a food security strategy to alleviate food insecurity in Africa and elsewhere. The basic economic framework for such a strategy appears to be straightforward. Cultural and institution issues are more challenging and are addressed in papers by Professors Robert Paarlberg and Joseph Molnar. Before addressing the principal objective of this paper—outlining an economic strategy for food security—selected definitions and perspectives on the economic, social, and institutional foundations of food security are presented.
Definitions of Food Security
Defining food security as access to food emphasizes only one of three dimensions of food security, the other dimensions being availability and utilization. Availability of food, referring to the supply of food from production, imports, or stocks is not now of overriding interest, given the rising per capita global supply apparent in Table 2. With perennial availability of food in world markets for anyone with buying power, perhaps it is not surprising that accessibility, defined as ability to obtain food from earnings, transfers, foreign exchange, or other sources, is the major constraint to food security. Because most food insecure people live in rural areas of developing countries, food production (availability) is also buying power (accessibility) for many people. However, especially among landless peasants, smallholders, and hired agricultural workers with high incidence of food insecurity, most individuals are net food buyers (Barraclough 1991, p. 42; Tweeten et al. 1997). Arbitrarily raising food prices by government programs or other means usually raises rather than reduces food insecurity even though food producers gain. Nonetheless, raising access to food by raising production and real incomes of food insecure people remains the principal route to food security.
A final critical dimension of food security, utilization, refers to actual metabolization of food by the body. Food that is available and accessible does not alleviate food insecurity if people do not utilize food properly because of inadequate nutrition education, bad habits, eating disorders, or poor health such as intestinal parasites from unsanitary water. Thus, food security is not achieved without utilization by all people at all times of sufficient nutrients for a productive and healthy life. It follows that sanitation, education, and health care are important instruments for food security.
Despite per capita world food supplies more than adequate to provide food security to all, food or income transfers cannot be the principal instrument to end food insecurity. One reason is
that altruism is too limited and fickle to provide sufficient, reliable transfers. Heavy dependence on transfers could create an unhealthy dependency of poor nations and individuals on rich nations, agencies, and individuals. Massive food transfers would destroy incentives for local food producers.
Only the poor lack access to food, thus alleviating food insecurity means alleviating poverty. Most of the world’s poor (the 1.3 billion people with income of less than $1 per day) will have to be lifted from poverty and food insecurity through economic growth. Economic growth largely was responsible for the 158 million reduction in numbers of undernourished people in East, South, and Southeast Asia from 1979–81 to 1990–92 (Table 1). And the 67 million net increase in number of undernourished people in Sub-Saharan Africa in the same period is largely due to lack of economic progress.
Ingredients for Economic Progress
Figure 1 presents a stylized paradigm of economic progress recognizing the attitudinal (social and psychological), institutional, and economic dimensions. One of the three most important ingredients for economic development improving the well being (including food security) of present and future generations is natural resources including air, soil, water, climate, minerals, and biodiversity. Geography may be regarded as a natural resource. Sachs (1997, pp. 19,20) found that income per capita of landlocked countries grew 0.7 percentage points less and of tropical countries grew 1.3 percentage points less than income of other countries.
The biosphere as an ecosystem provides raw materials such as petroleum and phosphate but also provides a "sink" absorbing effluents. Some (see Daly 1996) contend that living standards of people will be more constrained by lack of absorptive capacity of natural resources as a sink than by limits on the supply of fossil fuels and other stock resources. Nations (e.g. Japan, Hong Kong, Singapore) can have high living standards and food security without being rich in natural resources. Other basic ingredients are more important for economic progress of nations but global natural resources availability could increase constraining economic progress as noted later.
The second basic ingredient for progress is institutions such as government, markets, and laws (Figure 1). Institutions constitute the rules of the game underlying the allocation of resources to meet the wants of people. Institutions such as universities are repositories of accumulated knowledge and gene banks are repositories of biodiversity essential to agricultural science and technology. Institutional innovations such as limited liability corporations, legally enforceable property rights, and investment banks invigorated markets. In many ways institutions are mediators between attitudes, the third ingredient of economic progress, and natural resources. However, a case can be made that, over time, institutions such as government and markets change culture.
The third basic ingredient of economic progress, attitudes, constitute a range of attributes commonly called culture, goals, beliefs, and values of society. Attitudes conducive to economic progress and food security include morality (e.g., not taking advantage of others even if presented the opportunity), enterprise (entrepreneurship), industry (work ethic), thrift (deferred gratification), acquisitiveness (wealth seeking), intellectuality (desire for learning), and national community (McClelland, 1961; Tawney, 1926; Tweeten, 1979; Weber, 1930).
Figure 1. Elements of Economic Progress and Food Security
Error! Not a valid link.
Source: Tweeten and Brinkman 1976, p. 60.
Most of these attributes are self explanatory and need little elaboration. The Protestant ethic (Tawney, 1926; Weber, 1930) and Confucist ethic (Johnston, 1966) contain elements of morality, work ethic, and enterprise believed to be conducive to economic progress. Other attributes have shown increasing importance in recent decades. For example, intellectuality, apparent in commitment to education as a means to economic progress, has played no small part in the human resource development and economic success of East Asians in their home countries and as ethnic groups in the United States and elsewhere. A sense of community implies not only identification with others, but also a willingness to sacrifice (e.g. pay taxes) for their benefit. The importance of national community is apparent especially in the negative—lack of a sense of national community evident in tribalism or sectarianism has been the major cause of civil violence underlying most famines since World War II.
Fundamental ingredients for economic growth have numerous trade-offs. Favorable attitudes and/or institutions can compensate for lack of natural resources, for example. Thus lack of agricultural resources in a country does not relegate it to food insecurity. Natural resources in other countries can offset if countries are open to trade. And inadequate institutions as in China can be offset by enterprising people and a strong work ethic. Presence of all three basic ingredients in Figure 1 ensures economic progress.
Food security and economic progress is largely a matter of accumulating material, human, and technological capital per unit of raw labor (Figure 1). For example, an industrious, thrifty nation with a high propensity to save and to invest wisely in high payoff activities (efficiency) creates capital (Figure 1). Well-being of people derives from the level (efficiency or the economic size of "pie") as well as the distribution of benefits (equity). Food security is best served when economic progress is broad-based with human resource investments and opportunities open to the disadvantaged, minorities, women, and others. Such development must also provide public goods and correct externalities for sustainable progress.
The Standard Model
The broad outline for economic progress in Figure 1 requires a policy blueprint for the process by which attitudes, natural resources, and institutions create capital and economic progress to alleviate poverty and food insecurity. A seminal development in economics since World War II is validation of the standard model for economic progress (see Tweeten et al., 1997).
The standard model relies on markets to allocate goods and services that are rival and exclusionary. There is no one optimal size for the public sector but Tanzi and Schuknecht (1995) concluded that economics with the lowest rise in public spending from 1960 to the 1990s were more efficient and innovative and had more rapid employment and patent registration growth. A public sector of no more than one-fourth of GDP appears to be adequate for economic progress and food security if military spending is restrained and social security is privatized. Most decisions of what, when, where, and what to produce are left to prices reflecting market supply and demand; the standard model calls for a lean public sector doing a few things well. The standard model has triumphed, not because of its elegant neo-classical economic origins, but because it works. Economies of Hong Kong and Chile following it have succeeded spectacularly while those of nations rejecting it such as the Soviet Union, North Korea, and Cuba have failed even more spectacularly. Anecdotal evidence for the standard model is telling, but analytical studies make the case even more compelling (Agarwala, 1983; Bale and Lutz, 1981; Gwartney et al., 1996; Holmes and Kirkpatrick, 1996; Sachs, 1997; Zhao et al., 1991).
Of course, economic progress differs among countries adopting the standard model because countries differ in natural resources endowments, institutions, and attitudes (see Figure 1). No country fully follows the model; some countries appropriately choose the trade-off of more safety net and less economic growth. It is important to emphasize that following the standard model is more important for food security in countries with the least favorable attitudes and natural resources. To save space, those public functions required for economic progress and food security are presented below in brief outline form.
1. The macroenvironment needs:
· Honesty and competence in public administration. Corruption in government undermines economic progress (Sachs, 1997).
· Security, stability, order. The rule of law and order needs a judicial system to administer justice and interpret laws. Government needs to strive for an environment where business plans (contracts) can be made and carried out.
· Property rights. To encourage investment and improvements in property, investors must be able to "reap what is sown." Property rights allow property to be used as collateral for loans. A favorable investment climate avoids capital flight and attracts foreign direct investment.
· Competition. Governments need to avoid giving protection to firms exercising monopoly power. In the case of natural monopolies (only one firm can operate at low cost per unit of output), regulation or cooperatives are sometimes helpful. But open trade to countervail the economic power of domestic firms is often the most effective option. Parastatals (state-owned enterprises) need to be avoided where possible.
2. Sound macroeconomic policies include:
· Fiscal responsibility. Countries need to avoid deficits in their operating account. A deficit is justified in the capital account only for investments with the strong chance of a return that will pay the principal and interest, plus leave a social dividend.
· Monetary restraint. A useful rule of thumb is to increase money supply at the real GDP growth rate, with appropriate adjustments for foreign exchange and direct investment. A central bank at "arms length" from political pressure, and with the sole objective of price stability is useful.
· Appropriate taxation. One of the most difficult challenges in any developing country is to collect taxes to pay for even minimal public services. Successful governments try to tax "bads," (consumption, tobacco, alcohol, emissions), not "goods" (investment, exports). They charge user fees to cover costs for electricity, irrigation water, and the like provided by the public sector. The sales tax, value-added tax, and property tax distort the economy less than taxes on corporate profits and exports.
3. A successful developing economy utilizes foreign markets. Chief elements of a liberal trade policy include:
· Properly valued foreign exchange.
· Open economy to investment.
· Uniform, if any, taxes on imports.
4. A proper infrastructure requires investment in:
· All-weather roads for food security and to encourage commercial activity consistent with comparative advantage.
· Bridges, seaports, airports, electricity, and the like.
5. Some public services offer high returns.
· Agricultural research offers unusually high returns on investment, but Africa spends less than 0.5 percent of agricultural GDP on agricultural research. Raising public and private spending to 1 percent of agricultural GDP could pay high dividends because agriculture frequently accounts for 60-80 percent of the labor force and 40-60 percent of GDP in less developed countries.
· Human resource investments are essential for broad-based development for women and men, including minorities. Because rates of return on elementary schooling investment are especially high, universal elementary schooling is a priority for food security and development.
· Sanitation for food security requires attention to water and waste. Parasites and bacteria interfere with digestion of food and sap vitality.
· Health clinics staffed by volunteers and paraprofessionals can provide cost-effective services such as immunization, vitamin supplements, family planning, and pre- and post-natal care.
6. Environment. For development to be sustainable, attention must be given to the environment. This is especially urgent where poverty attends high population growth and density. Agriculture can benefit from integrated crop management (forage legume rotations, alley cropping, etc.), conservation tillage (no-till, ridge till, mulch till), integrated pest management (economic threshold intervention, biological pest controls, pest resistant crops and livestock, best management practices), integrated crop-livestock systems including forage legumes, and integrated forest management (plantation forests, ecotourism, etc.).
7. Food and income safety net. The public safety net is for those unable to depend on themselves, the market, family, or other private sources. Landless peasants, smallholders, and urban poor are especially vulnerable. Options include targeted humanitarian food assistance and food for work. The height and breadth of the safety net is a political decision, and is not dictated by the standard model. A high safety net as characterized by the term "welfare state" often means slow economic growth and lack of "creative economic destruction" pruning economic deadweight. The safety net can be expanded as development progresses.
Not all elements of the standard model can be pursued simultaneously. Priorities are policy reform, agricultural technology adaptation, elementary schooling, and infrastructure (Tweeten and McClelland, 1997). Countries experience poverty and chronic food insecurity are not following the standard model, hence the overarching priority is policy reform. Lagging countries need to show a commitment to reform before significant aid begins, except for humanitarian assistance.
Foreign assistance is especially critical in early stages when the economic base of a developing country is too low to provide even minimal development tools such as improved agricultural technology. Development assistance can be decisive for countries to break the vicious poverty cycle of too little income to support infrastructure and education necessary to raise income. But the most important contribution to developing countries is to open global markets. Many African countries, for example, will not be able to prosper on agriculture alone. They will need to shift to manufacturing products for export after improvements in agriculture first provide the economic base to improve human capital essential for competing in nonfarm industries and attracting foreign direct investment.
Food security problems differ by length of run. In the short run with given food supplies, the challenge is buffer stocks and open trade to match food availability with individual food needs. In the intermediate run, the challenge is economic growth featuring greater productivity to raise food production and consumer buying power. In the long run, the challenge is for the demographic transition to run its course to zero population growth (ZPG). Family planning alone will not suffice; higher incomes are necessary to provide schooling, urbanization, gender equality, health care for child survival, social security, and other contributors to lower birth rates and ZPG in developing countries. Developed countries are mostly near or even below crude fertility rates needed for ZPG. The food security dilemma is how to raise incomes of the masses in developing countries of Sub-Saharan Africa, and South Asia, and elsewhere to levels bringing ZPG without jeopardizing the global environment and natural resource stocks over time. Measures such as petroleum taxes to slow auto petroleum use and greenhouse gases in the United States can make tradeoffs less globally disturbing for developing countries.
World Food Summit
Heads of governments and their representatives met at a World Food Summit (WFS) in Rome in November 1996. The Rome Declaration from Summit participants pledged eventual food security for all with an immediate target of reducing the number of undernourished people by half by no later than year 2015 (FAO, 1996c, p. 1).
Given the FAO projection in Table 1 of only a 14 percent reduction in undernourished persons from 1990-92 to 2010, the WFS commitment to a 50 percent reduction from 1996 to 2015 (the same number of years) is challenging and probably unattainable. It may be as quixotic as Henry Kissinger’s call at the World Food Conference of 1974 that no person should go to bed hungry by 1984. More realistically, the Summit Declaration called for policies generally consistent with the standard model including:
An enabling political, social, and economic environment.
Full and equal access to opportunity for all, including men and women.
Public and private investments, including "technical…and financial resources from all sources" to promote food security.
"Overall trade policies…fostering food security for all through a fair and market-oriented world trade system."
Sustainable development for food security through human resources development, research and extension, infrastructure investment, and access to health care.
Measures to combat drought and natural resources degradation including desertification and erosion of biological diversity.
Some of the Declaration was controversial to mainstream economists. The call for public and private investments "in high and low potential areas" violates the principle that ceteris paribus, more food insecurity can be alleviated with a given investment in high than in low potential areas. The best strategy in many low potential areas is to encourage resources, including people, to shift to high potential areas—often to off-farm employment.
An area of contention was the reluctance of the United States to embrace a strong "right to food" commitment. Other WFS participants contended that the right to food should come before the quest for profit. The Summit affirmed the rights to safe and nutritious food, to be free from hunger, and to development. The U. S. representatives interpreted the "right to food" as only "an objective or aspiration, and not a binding commitment or obligation" (ODI 1997, p. 4).
The U. S. objected to enshrining the right to food as a universal human rights principle in part for practical reasons: Federal welfare reform allows states to terminate food stamps to able-bodied recipients after a prescribed period if they fail to seek employment. If food is a universal human right, such action could embarrass the U. S. through Amnesty International and the World Court. An unenforceable, unimplementable "human right" without personal responsibilities could become a source of cynicism and complacency among the world’s rich and poor nations alike.
The principal challenge to the World Food Summit proclamation and the standard model it resembled came from the non-government organization (NGO) forum held coincidentally with the Summit and representing over 1,000 organizations from 80 countries. The NGOs and WFS differed on several points:
A major point of disagreement was over the concept of sustainable agriculture. The NGOs wanted low-input farming systems built on agro-ecological principles including minimal intervention in nature and minimal use of synthetic chemical pesticides, commercial fertilizers, and biotechnology. The WFS was supportive of science and technology to raise yields especially on environmentally less fragile land to reduce soil erosion, deforestation, and desertification while protecting wildlife and biodiversity.
Another difference was over benefits of trade. The NGOs favored fair trade based on principles of food security—emphasizing self-sufficiency and fossil energy conservation. In contrast, the WFS favored free trade, approved of the Uruguay Round, and favor continuing trade liberalization consistent with food security.
Trade cannot be separated from the issue of export cropping. Empirical evidence does not support the alternative agriculture position that export cropping reduces food security. Epplin and Musah (1985) estimated that Liberian farmers could have three times as much rice by producing tree crops for export and buying rice imported from neighboring countries than by producing their own rice. Tree crops would also save soil. Data from two Kenya studies "suggest that increased household income from commercialization of agriculture can make a major contribution to the solution to the hunger problem…" (Kennedy 1989).
NGOs were highly critical of transnational corporations, noting their lack of accountability for environmental degradation and for depleting natural and biological resources such as rainforests. The WFS recognized the need to impose restraints on transnationals to protect resources, but also recognized that countries experiencing widespread food insecurity are unlikely to progress without the technology, capital, management, and access to markets provided by transnational corporations.
The NGOs were critical of structural adjustment programs of the World Bank and International Monetary fund, contending that these have imposed undue burdens on poor, food insecure people. The counter argument is that, while more needs to be done to cushion adjustment impacts on disadvantaged people, the principal cause of food insecurity is failure to follow the standard model. Current misguided policies cannot be corrected quickly or painlessly.
Finally, the most serious difference between the NGOs (including alternative agriculture advocates in general) and mainstream economics as embodied in WFS proclamations is over economic growth itself as discussed in the following section.
The Case for Economic Growth
The principal challenge to economic growth as a means to food security comes from environmentalists. Estimates of the world’s carrying capacity by Cohen (1995) based on water availability range from 1.1 billion to 137 billion people. Estimates by other analysts cited by Cohen range from 1 billion to 1,000 billion people. Daly (1996, Chapter 2) proposes imposing specific limits on growth, contending that the world can provide neither natural resources nor emission absorptive capacity for global living standards at levels currently found in industrial countries. Such thinking fails to account for the ability of markets to ration scarce resources as growth proceeds, the move to service economies requiring fewer natural resources per unit of output at higher living standards, the ability of science to find substitutes for resources in short supply, and the trend to zero population growth.
Kuznet’s Curves depict the impact of economic growth on the environment. Curves for several environmental impacts such as soil erosion, desertification, carbon emissions, species loss, acid rain, water quality, and deforestation are an inverted "U"—things get worse before they get better with economic growth (see World Resources Institute, 1996, pp. 162-165). At least three problems continue to worsen with growth, however: (1) carbon dioxide accumulation in the atmosphere, potentially creating global warming, (2) solid waste accumulation, and (3) fossil fuel and other nonrenewable mineral stock resource depletion. Global warming would cause sizable realignment in food and fiber production among regions, but would not necessarily reduce global production (Balling, 1995). Solid waste accumulation and proper disposal do not pose a significant threat to food supplies. Fossil fuel and rock phosphate depletion poses a greater threat, but science and technology could develop options to minimize threats to living standards and food supplies.
A principal advantage of economic growth is that it provides resources to fund critical services such as education and research, well-paid civil servants to protect common property such as tropical forests from destruction, and infrastructure such as all-weather roads, irrigation facilities, and ports. Indiscriminate logging of tropical forests rich in biodiversity but with fragile soils often occurs because poorly paid members of government are "bought off" by logging companies which in turn do not replant or otherwise practice good environmental stewardship. Loggers are followed by hungry peasants who convert the land to farming.
Economic growth funds science and technology essential to improve agricultural and national productivity. An economic base to fund research in developing countries is essential to adapt agricultural technology from elsewhere to local circumstances and to develop environmentally friendly farming systems. Improved science and education also can address problems of disease, pestilence, ignorance, and tribalism that threaten food security.
However, the most important long-term contribution of economic growth to food security is to reduce population growth—eventually to zero. Income from economic growth also is essential to fund health clinics providing immunization, vitamin and mineral supplements (especially for young children and pregnant and lactating women), oral rehydration, family planning, and the like. Greater income provides funding for health technology and services allowing more children to survive (so crude fertility rates need not be high to assure children to care for elderly parents), to fund social security or savings for retirement, to raise agricultural productivity so that more people can live in urban areas where children have less economic value and hence create less incentive for large families, and where education and economic growth opportunities give economic options to women beyond being a housewife raising children. Demographers (United Nations, 1996) project zero global population growth (ZPG) by year 2100 or before, one of the most promising portents for future food security. While growing income and population (before reaching ZPG) could double food demand, and food demand will continue to rise slowly even after reaching ZPG, there can be little doubt that the challenge of doubling or even tripling food supplies can be met with the help of science and technology made possible by economic progress (Tweeten, 1997).
Achieving Economic Equity
While a large "pie" of income is essential to provide food security and other basic needs for all, how that "pie" is distributed is of concern. Simple ideas of producing food for profit rather than for people (as in "Peoples" republic, meaning the state) and providing an economic climate favorable to transnational corporations have raised hundreds of millions of Chinese out of poverty and food insecurity, but the absolute gap in income between the poorest and richest Chinese has grown. The same distributional trends are occurring globally. The income gap is widening between the poorest and richest nations although the share of the world’s income held by developing countries is likely to grow.
Gini coefficients (0 = perfect equality of income to 100 for complete inequality) reported by the World Bank (1996, pp. 196-197) range from an average of 40.9 for 27 low income economies and 39.2 for 30 middle income countries to 44.9 for eight upper middle income countries. (Gini coefficients were not shown for high income countries.) The proportion of income held by the poorest 20 percent of the population ranged from 6.2 percent for low income countries and 6.5 percent for middle income countries to 5.9 percent for upper middle income countries. The similarity in distribution coefficients among countries ranked by income is striking. The results suggest that the tide of economic progress tends to lift, if not all, most boats and that the fruits of economic progress do indeed reach lower income people either directly as earnings or indirectly as transfers from those who earn more.
Berry (1997) observed that liberalization of Latin American economies widened income distribution in most instances. The widening distribution of income under structural adjustment may be a manifestation of Kuznet’s hypothesis that economic growth first widens and then narrows the distribution of income. Liberalization may initially depress economies because aggregate demand first falls when a nation stops living beyond its means under structural adjustment. Also, more open trade often displaces low wage workers form factory jobs. However, one country, Costa Rica, did not conform to the pattern of widening distribution of income with liberalization perhaps because of its more equal initial distribution of human capital in the form of education. Other countries investing broadly in human capital eventually are likely to narrow their income distribution as growth progresses.
Unequal initial distribution of assets more than unequal income slows economic growth according to analysis by Deininger and Squire (1997, p. 40). They found almost no association between income inequality and growth but noted that "even when inequality has worsened, its negative effect on the poor has been more than outweighed by the positive effect of growth" (p. 40). The prospect of narrowing income distribution with growth in the long-term is one reason why Berry (1997, p. 239) concluded that "…the best policy to reduce poverty in economies mired in stagnation and underutilization of capacity is to get the economy moving."
Economic outcomes will be more egalitarian and food security greater if the standard model is applied to countries with more equal initial distributions of asset ownership. Barraclough (1991, p. 130), after reviewing substantial land reform literature, notes that in countries where rural poverty is widespread and closely associated with power of the landowning class, "Land reform becomes the only option for improving rural livelihoods rapidly and substantially." Yet he cautions that land reform "cannot normally be a policy option for governments" (p. 130).
Other redistributional options offer greater promise. With economic growth, opportunities for redistribution through human resource investments dwarf those from land redistribution and are likely to induce less violence. For example, of the $16 trillion in U. S. wealth in 1990, up to 85 percent was human capital and only 4 percent was farm real estate (Tweeten et al. 1997, Ch. 9). In the poorest regions of Africa and Asia in 1994, human resources comprised 60 percent of all assets and "natural" capital including agricultural land comprised only 10-20 percent (Dixon and Hamilton, 1996, p. 16). Property taxes are not widely used in developing countries, but property taxes have been used for a century or more in developed countries and, if rates are graduated, could be a force for more equitable asset distributions. A sense of community and public administrative capability are required, however, for asset redistribution. As such, devolution of authority to local communities is long overdue in many countries. Smaller places have a sense of community and see the connection between taxes and services. Hence, they have a greater capacity to tax property to fund local schools and roads.
Conclusions
This paper outlines what Tweeten et al. (1997) call the food security synthesis for poor developing countries:
1. Transitory and chronic food insecurity is caused mainly by poverty. People with adequate buying power overcome the frictions of time (e.g., unpredictable, unstable harvests from year to year) and space (e.g., local food shortages) to be food secure.
2. Poverty is best alleviated through broad-based, sustainable, economic development.
3. The most effective and efficient means to economic development is to follow the standard model, which assures an economic "pie" to divide among people and among functions
such as human resource development, infrastructure, family planning, a food safety net, and environmental protection. The standard model is applicable to any culture and provides a workable prescription for economic progress ensuring buying power for self-reliance and food security. Eventually, in conjunction with family planning, it brings zero population growth. It is not an unworkable ideal. Although no country has adopted every component, many countries have adopted enough components of the standard model to bring economic success.
4. The standard model is not followed in food insecure countries partly due to economic illiteracy but mainly due to political failure. Individuals and groups with power and authority often lose with political change¾ even if current policies are egregiously incongruent with the public interest. Economic distortions provide economic rents for those in authority who bestow licenses and enforce regulations. Parastatals provide employment for friends and relatives of power brokers. Hence bad public policy carries powerful momentum.
5. Political failure is inseparable from institutional failure. Food insecurity and economic stagnation are not the result of limited natural resources, environmental degradation, or ignorant people. Rather they are the result of misguided public policies, which in turn are the product of weak institutions and corrupt governments serving special interests. Institutional change is required to adopt the standard model.
6. Poorly structured, inadequate institutions often trace to cultural factors such as tolerance of the public for unrepresentative, corrupt, incompetent government, and indifference to the broad-based involvement of citizens in government. Government leaders often view their position as an opportunity for personal aggrandizement rather than to be a servant of the public interest. Socioinstitutional change and hence standard model adoption are blocked by cultural characteristics such as tribal animosities which provide a fertile climate for governments not representing the public interest to play one group against another.
7. The challenge of food security for our time is socioinstitutional change. How to bring about such change deserves attention by the best minds in economics, sociology, political science, and other disciplines.
References
Agarwala, R. 1983. "Price Distortions and Growth in Developing Countries." Staff Working Paper No. 575. Washington, D. C.: World Bank.
Bale, M. D., and E. Lutz. 1981. "Price Distortions in Agriculture and Their Effects: An International Comparison." American Journal of Agricultural Economics 63: 8–22.
Balling, Robert C., Jr. 1995. "Global Warming." Chapter 3 in Ronald Bailey, ed. The True State of the Planet. New York: The Free Press.
Barraclough, Solon. 1991. An End to Hunger? London: Zed Books.
Berry, Albert. 1997. "The Social Challenge of the New Economic Era in Latin America." Pp. 199–264 in Constanza Valdes and Terry Roe, eds. Economic Integration of the Western Hemisphere. St. Paul, MN: Department of Applied Economics, International Agricultural Trade Consortium, University of Minnesota.
Cohen, Joel. 1995. How Many People Can the Earth Support? New York: W. W. Norton and Company.
Daly, Herman. 1996. Beyond Growth. Boston: Beacon Press.
Deininger, Klaus and Lyn Squire. March 1997. "Income Growth and Income Inequality." Pp. 38–41 in Finance and Development. Washington, D.C.: IMF and the World Bank.
Dixon, John and Kirk Hamilton. December 1996. "Expanding the Measure of Wealth." Pp. 15–17 in Finance and Development 1(33). Washington, D.C.: IMF and World Bank.
Epplin, Francis and Joseph Musah. 1985. "A Representative Farm Planning Model for Liberia." Chapter 4 in Proceedings of the Liberian Agricultural Policy Seminar 1985. Report B-23. Stillwater: Agricultural Policy Analysis Project, Department of Agricultural Economics, Oklahoma State University.
FAO. 1996. Data of Food and Agriculture 1996. Rome: Food and Agriculture Organization of the United Nations.
FAO. 1996b. World Food Summit: Synthesis of the Technical Background Documents. Rome: Food and Agriculture Organization of the United Nations.
FAO. 1996c. The Rome Declaration on World Food Security and the World Food Summit Plan of Action. Rome: http://www.fao.org/WFS/policy/policy.htm.
Gwartney, James, Robert Lawson, and Walter Block. 1996. Economic Freedom of the World: 1975–1995. Vancouver, Canada: Fraser Institute. London: Institute of Economic Affairs.
Holmes, Kim, and Melanie Kirkpatrick. 1996. "Freedom and Growth." The Wall Street Journal, Monday, December 16, p. A12.
Johnston, Bruce F. 1966. Agriculture and Economic Development. Food Research Institute Studies 6: 251–312.
Kennedy, Eileen. 1989. The Effects of Sugarcane Production on Food Security, Health, and Nutrition in Kenya. Research Report 78. Washington, D.C.: International Food Policy Research Institute.
McClelland, David. 1961. The Achieving Society. Princeton, NJ: Van Norstrand.
ODI. February 1997. "Global Hunger and Food Security After the World Summit." Briefing Paper. London: Overseas Development Institute.
Sachs, Jeffey. July 14-20, 1997. "The Limits of Convergence." The Economist, pp. 19-22.
Rosegrant, Mark W., Mercidita Agcaoili-Sombilla, and Nicostrato D. Perez. October 1995. "Global Food Projections to 2020: Implications for Investment." Food, Agriculture, and the Environment Discussion Paper 5. Washington, D. C.: International Food Policy Research Institute.
Tanzi, V., and L. Schuknecht. December 1995. "The Growth of Government and the Reform of the State in Industrial Countries." IMF Working Paper. Washington, D. C.: International Monetary Fund.
Tawney, R. H. 1926. "Religion and the Rise of Capitalism." In Stanley Coben and Forest Hill, eds., American Economic History. New York: Lippincott (reprinted 1966), pp. 6–17.
Tweeten, Luther. 1979. Foundations of Farm Policy. Lincoln: University of Nebraska Press.
Tweeten, Luther. December 1989. "The Economic Degradation Process." American Journal of Agricultural Economics, 71: 1102–1111.
Tweeten, Luther. 1997. Competing for Scarce Land: Food Security and Farmland Preservation. Columbus, OH: Department of Agricultural Economics, The Ohio State University.
Tweeten, Luther and George Brinkman. 1976. Micropolitan Development. Ames: Iowa State University Press.
Tweeten, Luther and Donald G. McClelland, eds. 1997 (forthcoming). Promoting Third World Development and Food Security. Westport, CN: Praeger.
Tweeten, Luther. 1997 (forthcoming). Food Security. Chapter 9 in Luther Tweeten and Donald G. McClelland, eds., Promoting Third World Development and Food Security. Westport, CN: Praeger.
United Nations. 1996. World Population Prospects: 1996 Revision. (Annex II and III). New York: Department for Economic and Social Information and Policy Analysis, Population Division, UN.
Weber, Max. 1930. The Protestant Ethic. London: Allen and Unwin.
Westoff, Charles. 1996. "Reproductive Preferences and Future Fertility in Developing Countries." Chapter 4 in Wolfgang Lutz, ed., The Future Population of the World. Luxembourg, Austria: International Institute for Applied Systems Analysis.
World Bank. 1996. From Plan to Market: World Development Report 1996. New York: Oxford University Press.
World Resources Institute. 1996. Basic Economic Indicators. Chapter 7 in World Resources: The Urban Environment, 1996–97. New York: Oxford University Press.
Zhao, Fenkum, Fred Hitzhusen, and Wen Chern. 1991. "Impact and Implications of Price Policy and Land Degradation on Agricultural Growth in Developing Countries." Agricultural Economics 5: 311–24.