The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

Food prices and political instability

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Some see a political opportunity in seizing on the moment of domestic economic uncertainty to take an axe to programs that help people build self-sufficiency and overcome backbreaking poverty.

Care of my much smarter colleague Duncan Green, here’s a new IMF Working Paper putting to-the-test the oft-quoted theory that food price spikes lead to increased political instability, particularly in poor countries. Low and behold, when tested against empirical data across 120 countries for a period of nearly 40 years, the theory seems to hold water.

Graph by USAID
Graph by USAID

“Our main finding is that in Low Income Countries increases in the international food prices lead to a significant deterioration of democratic institutions and a significant increase in the incidence of anti-government demonstrations, riots, and civil conflict…To provide an explanation for the adverse effects of food price increases on Low Income Countries’ political institutions, we document that food price increases significantly increase the incidence of intra-state conflict.”

As prices began to spike in late 2010, many observers raised the alarm that high prices are often followed by moments of violence and political uncertainty. A short time later, riots in Tunisia and Algeria helped spark a wave of protest, instability, and violence that continues to dominate the political agenda in capitals around the world, including our own.

But here in the US, another debate is going on over how our government will allocate resources in the federal budget. Some see a political opportunity in seizing on the moment of domestic economic uncertainty to take an axe to programs that help people build self-sufficiency and overcome backbreaking poverty. Some of these programs help mitigate the impacts of price spikes on the poorest, and could reduce the likelihood that the US will get drawn into costly interventions across the globe.

Graph by USAID.
Graph by USAID.

This working paper helps confirm what military officials, businesses, and humanitarians alike have said for years, that making irresponsible cuts to our international affairs budget, already less than 1% of federal spending, will just cost us more in the long-run. Cut now, pay later. I hope a few members of Congress take a moment to read it.

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