Export Crops and Extra Conflict

I recently stumbled upon this new(ish) paper, by Benjamin Crost and Joseph Felter published in the June 2020 issue of the Journal of the European Economic Association. This paper shows a plausibly causal link between the export value of agricultural products (e.g. bananas in this case) and violent civil conflict. This is an important and interesting link because decades-old theories of economic development suggest the shift to high-value (and export-oriented) agricultural production is an important mechanism driving economic growth and poverty reduction.

Let’s dig into this bananas paper! (Okay, sorry about that.)

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#OARES Ask the Editors Panel—Submit your Questions

Along with my co-organizer, Marc Bellemare, I am very excited to announce a special Ask the Editors Panel session in the Online Agricultural and Resource Economics Seminar (OARES). This special session will be held on Wednesday, September 16—at the usual time and place—11:00 am CST, online.

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Do Commodity Price Shocks Cause Conflict?

The natural resource curse (sometimes called “Dutch disease”) was one of my first fascinations in development economics. It represents the apparent “paradox” of a boom in natural resource wealth leading to less economic growth. There are, of course, numerous theories as to why this observation persists. One popular theory, that is repeatedly tested empirically, is that sharp and dramatic changes in the prices of these resources lead to conflict, which in turn slows economic growth.

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Mini-Summaries from MIEDC 2018

A couple weekends ago, my department (Applied Economics at the University of Minnesota) hosted the Midwest International Economic Development Conference (MIEDC). It is a smaller conference with tremendous quality of presentations. Despite this, many are not able to attend the conference or even all of the sessions. As a service to those interested, a few colleagues and I posted a recap of the 2018 MIEDC on the Economics That Really Matters blog.

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Reforming Global Food Aid

A small but important slice of the US federal budget contributes to global food aid intended to help the hungry around the world. Recently the House Foreign Affairs Committee held a forum to discuss reforms. The panel of experts included former US Secretary of Agriculture Glickman, former Chief Administrator of USAID Dr. Rajiv Shah, Professor of Applied Economics at Cornell University Dr. Chris Barrett, and President of Bread for the World David Beckmann.

Here’s a brief summary of the points made by each of the panelists:

Mr. Glickman:

  • Providing food to those in humanitarian conflicts is extremely important.
  • The US historically has provided about half of global food aid.
  • The food aid program no longer provides benefits to the American agricultural system as it once did.
  • Therefore reform of US global food aid will not negatively impact US farmers.

Dr. Shah

  • We have evidence that cash vouchers saves more lives and is much more effectives than sending food abroad.
  • US global food aid needs more flexibility to meet the needs of any given humanitarian situation.
  • Our discussion today is possible due to the ability to test and collect data.

Dr. Barrett

  • The current restrictions on US food aid waste tax payer money at a human cost.
  • Inflation adjusted US food aid has decreased by 80% since the 1960s.
  • The evidence is clear: the most effective way to help hungry people around the world is by providing cash, electronic transfers, or by purchasing food locally.
  • Every dollar spent on US food aid generates only 35-40 cents of food purchased. The rest goes to shipping and handling. For sake of comparison Canada gets about 70 cents to the dollar spent on their food aid.
  • This translates to a conservative estimate of 40-45,000 children’s lives lost per year.

Mr. Beckmann

  • The world is experiencing a current surge in humanitarian need and the resources are not keeping up with the need.
  • Food aid is no longer important to American agriculture. What is important to American agriculture is the vast reduction in hunger and poverty
  • The progress we are making globally in reducing hunger and poverty is nothing short of remarkable, but the job is not done.

AAEA 2015 Recap

This past week I was able to attend the Agricultural & Applied Economics Association Annual Meeting in San Fransisco. It was a fun event with lots of good discussion. In this post I’ll highlight a few of the most interesting sessions I attended. Unfortunately due to the nature of these sort of events, I was only able to attend a small fraction of the available sessions. I know I missed an excellent session on Incorporating Ethics in Economic Analysis with Paul Thompson, Jayson Lusk, David Just, and Harvey James Jr.

Agriculture in Africa: Telling Myths from Facts

The first session I went to summarized a large research project aiming to close the data (and knowledge) gap about agriculture in Africa by implementing nationally representative household surveys in six African countries. Here is a short intro video:

The research aims to confirm or deny the validity of several commonly perceived wisdoms about agriculture in Africa such as:

  1. The use of modern inputs, like chemical fertilizer, remains dismally low.
  2. Land, labor, and capital markets remain largely incomplete and imperfect.
  3. Agricultural labor productivity is low.
  4. Land is abundant and land markets are poorly developed.
  5. Access to credit remains low.
  6. African youth are leaving agriculture en mass.
  7. Trees on farms are negligible.
  8. African agriculture is intensifying.
  9. Women perform the bulk of Africa’s agricultural tasks.
  10. Seasonality continues to permeate rural livelihoods.
  11. Smallholder market participation remains limited.
  12. Post-harvest losses are large.
  13. Droughts dominate Africa’s risk environment.
  14. African farmers are increasingly diversifying their incomes.
  15. Agricultural commercialization and diversification improves nutritional outcomes.

I think this is a great list of “perceived wisdoms” because looking it over, I have a vague feeling or opinion about each one of these items, yet I have no data or evidence to back up this belief.

Aspirations, Social Networks, and Economic Behavior

As readers of this blog will know I’m thinking a lot about aspirations (or hope) as it relates to economic behavior. Some great new research as presented by a PhD candidate from the University of Georgia on this broad topic from work in Nepal.

Here’s the working paper: Social Drivers of Aspirations Formations and Failure in Rural Nepal.

I think this is an important research area and this paper makes a great contribution. The authors measure the association between individual’s aspirations for income and assets and the income and assets of people in their social network. This is important as it provides evidence of the theoretical work of Debraj Ray and Arjun Appadurai – saying that people’s hopes and aspirations for the future( which probably determine future-oriented decisions) is influenced by the relative levels of income and assets of others who have similar characteristics to them.

Agricultural Commercialization in the Developing World

There are two papers that deserve a mention under this topic. The first is a study on the welfare impacts of rising quinoa prices. Basically, should consumers in the developed world continue to consume quinoa at the rate we currently do? In short (and at risk of oversimplification) YES! It actually helps people in Peru. Read more from Marc Bellemare’s blog on Quinoa Nonsense, or Why the World Still Needs Agricultural Economists.

The second is a presentation on a replication study of Dean Karlan’s study on the impacts of export crop adoption in Kenya. In light of all the drama about the de-worming paper this past week, it was super interesting to see first-hand how a real replication study actually works. I’m still not sure what the term ‘replication study’ actually means, but I enjoyed this presentation and its implications for the rigor of the scientific process.

Here’s the replication paper: Recalling Extra Data: A Replication Study of Finding Missing Markets.

Applying Behavioral and Experimental Economics

I was also able to attend and participate in a post-conference workshop on behavioral and experimental economics. Part of this workshop was a great “mini-mentoring” lunch were I was able to discuss some research ideas with some very insightful folks. Most of the workshop was presentations by established researchers who are applying behavioral and experimental methods to their research on food policy, nutrition, and environmental policy. It was fascinating!

The highlight presentation discussed a recently published paper by David Just and Andrew Hanks on the Hidden Cost of Regulation: Emotional Responses to Command and Control.

There were certainly other excellent presentations, I just didn’t have a chance to see them. If you attended the conference, feel free to complete the list in the comments below.

Designing Research to ‘Succeed’

Several brilliant and whimsical verses from Robert Chambers and his new book Into the Unknown: Explorations in Development Practice:

How to Succeed with Irrigation Action Research 

Rural development’s all the rage
and irrigation’s reached the stage
when funds will flow if you can say
action research is on the way.
The title’s new, the techniques old,
the pickings rich for all the bold. 

Success eludes none but those fools
who do not heed some simple rules.
Reconnaissance you do not need
Prepare your programme with all speed.
For what to test no need to care,
choose any dogma that you hear.

Field leveling and OFD,
eight-hectare chaks, warabandi,
lining the channels or rotation
conjunctive use, participation—
pick any action that you will;
if fashionable, it fits the bill.

To choose the site, criteria
are simple, obvious and clear.
The most important one by far’s
a tarmac road for motor cars.
As well, it must be close to town
for rapid transit up and down.

Make sure the water flow is steady.
Have your staff there always ready.
If water’s short at system level
get it first and let the devil
take the hindmost at the tail.
For science, your interests must prevail.

Make sure the biggest farmers gain.
Their PR’s needed to explain
to VIPs on their brief stops
the splendid impact on their crops.
(Small farmers should not be a worry
No one will meet them in a hurry.)

Recruit the bankers to your team
and organize a credit stream
Good fertilizer, HYVs
and pesticides are sure to please.
And if you want to get first prize,
why then it’s best to subsidize.

So when it comes to harvest day
you’ll be all right—thanks NPK!
Crop-cutters, here’s the patch of field
where you will get the highest yield.
And non will know you are a liar
if you make it even higher.

If any area does badly,
cut it out, reject it gladly.
Say special factors made it fail—
a water shortage, pests or hail.
The only truth there is to tell
is found in place which do well.

So all is fine. You have succeeded.
The will to win was what was needed.
The yields are treble, water half,
you at the back, what makes you laugh?—
the farmers, they are satisfied.
It shows how very hard you tried.

Thus achieved the vital task.
In praise and glory humbly bask.
Honored for service and devotion—
who knows?—you may now get promotion.
If others fail to replicate
Poor honest fools, that is their fate.

(Delhi, early 1980s)

Links I Like [CfBD]

cfbd-logo-0023This month’s list of Links I Like will be dedicated to the smashing new development blog, The Campaign for Boring Development. Inspired by Marc F. Bellemare’s piece in Foreign Affairs entitled Development Bloat: How Mission Creep Harms the Poor. (P.S. Marc, if you are reading this, I’ve applied to your program at the U, show me some love!) The goal of CfBD is to bring back the “heretical” idea that the main reason people are poor is because they don’t have enough money.

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