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August 12, 2005

Owen Barder.

The Washington Post noticed the Niger famine and in the opinion of one aid bureaucrat (currently on sabbatical) were completely wrong in almost every detail.

An article in Thursday’s Washington Post by Craig Timberg claimed that “the rise of a market mentality” has contributed to the famine in Niger.  As you would expect, this has provoked a strong reaction from free market bloggers, such as Don Boudreaux at Cafe Hayek, Melana Zyla Vickers at TechCentralStation, Craig Newmark at Newmark’s Door, and Anthony Batty at The Globalisation Institute, who claim that the problem has been caused by price controls, excessive government regulation and the unintended consequence of well-meaning donor intervention.   

In this polarised debate, both ideological extremes are wrong. This is a reality-based blog, so here is the middle ground.   

First, Timberg’s claim that market liberalization has led to this famine is painfully misguided. He says:

 

“In a country adopting free market policies, the suffering caused by a poor harvest has been dramatically compounded by a surge in food prices and, many people here suspect, profiteering by a burgeoning community of traders, who in recent years have been freed from government price controls and other mechanisms that once balanced market forces.”

This does not make sense. Surely he cannot believe that food production would be higher, and more food would be available in Niger, if food prices were lower, for example as a result of Government price controls.  Rising food prices create incentives for higher production, marketing of stockpiled food, reduced exports and increased imports.  If Niger has too little food, then an increase in food prices is exactly what is needed to increase the supply.

Continued.

August 12, 2005 in Books | Permalink

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