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Policy Approaches to Undernutrition

Policy Approaches to Undernutrition. Text extracted from The World Food Problem Leathers and Foster, 2004. http://www.lastfirst.net/images/product/R004548.jpg. Ethics: Pope John Paul II. “Contrasts between poverty and wealth are intolerable for humanity”

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Policy Approaches to Undernutrition

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  1. Policy Approaches to Undernutrition Text extracted from The World Food Problem Leathers and Foster, 2004 http://www.lastfirst.net/images/product/R004548.jpg

  2. Ethics: Pope John Paul II • “Contrasts between poverty and wealth are intolerable for humanity” • “It is the task of nations, their leaders, their economic powers and all people of goodwill • to seek every opportunity for a more equitable sharing of resources” • Example of Beneficence • Personal moral duty to help the poor http://schoolnet.gov.mt/liceovassalli/mav/MAV%20Zones/Students/Essays/Pope%20John%20Paul%20II.jpg

  3. Ethics: Right to Food? • Right to Food • Included in International Covenant on Economic, Social and Cultural Rights • Adopted by UN • Signed by 85 countries • Now must address hunger issue • to protect fundamental rights of society • Don’t need to feel personal moral duty to help the poor United Nations http://orrinwoodward.blogharbor.com/United%20Nations%20Assembly.jpg

  4. Ethics: Right to Food? • Rights taken very seriously • Absolute entitlement • Non-negotiable • Would require government to act to prevent hunger • Conflict with property rights? Feeding orphans, Yemen http://www.yobserver.com/uploads/1/orphans5.jpg

  5. Economist’s Questions • What is the appropriate policy for society as a whole? • How can government best manipulate human greed to achieve its policy objectives? http://neweconomist.blogs.com/photos/uncategorized/20061110_inside_the_economists_mind_cove.gif

  6. How to Move Society Forward Government Manipulate self-interest to achieve policy goals Economy Ideology Capitalism Self-interest

  7. Economics Policy Decisions • Every action has costs and benefits • Marginal costs and benefits • For 1% increase in cost, what is the increase in benefits? • Ideal decision: where marginal costs = marginal benefits • Free market will allocate resources optimally, but • Without concern for • Social costs • Environmental costs • Can everything be put in dollar terms? Three Gorges Dam, China http://www.thelightisgreen.com/China%20Three%20Gorges%20Dam%2001.jpg

  8. Externalities • Costs and benefits sometimes go to people outside the market transaction • Should wealthy benefit from costs borne • By the poor? • Exploitation = externality • By the environment? • Exploitation = externality • To feed hungry has indirect benefit to wealthy • We feel better = externality • No market for this http://wheresmyamerica.files.wordpress.com/2007/08/smoke-stack1.jpg

  9. Every action has costs and benefits • How much would you pay for… • A human life? • Speed limit 10 MPH? • Nutrition for every man, woman, and child? • Food without pesticide residue? • No pollution? • Freedom? • Fair trade? http://www.superkidsnutrition.com/app_themes/sba_nutrition/images/NA_ProtectSelfFromPesticides.jpg

  10. Harnessing greed in policy • Economic incentives • Can make it more expensive • To have children • To degrade the environment • Need property rights • Production increases with reward • If we eat less: • other countries won’t benefit • Farmers will produce less • As demand increases • efficiency increases • Products made available more cheaply • Alternatives found http://sheepwaker.tripod.com/greed.jpg

  11. Policy to reduce undernutrition? • 250 Calories/day would erase Calorie deficit of hungry • Cost 35 cents/day/person • = $6,400 invested at 2% interest • Value of Human Life? • For 800 million people, this policy would • Increase food prices • Increase environmental costs of food production http://www.pbs.org/newshour/images/africa/july-dec07/1126_somalia_bhead2.jpg

  12. Policies to raise incomes of poor • Redistribute income from rich to poor • Rationale: declining marginal utility of income • Rich don’t benefit from a dollar spent as much as poor do • But should incomes be equalized? • Improve rate of economic growth • Is Globalization beneficial to developing nations? http://www.alliance2015.org/var/news/storage/images/galleries/world_poverty_map/2452-1-eng-GB/world_poverty_map.jpg

  13. Policies to reduce price of food • Population reduction • Demand will rise slower • Food prices will rise slower • Increasing supply • Research investment • Loans to farmers http://farm3.static.flickr.com/2300/2198720003_b56c80b97c_o.jpg

  14. Policies to reduce cost of food • Price supports • Sell food to consumers • Subsidies to farmers • Both reduce economic efficiency • Therefore distortionary • Corrective price policies • Example: correcting distortions that reduce food output

  15. Aid Policies • Aid can help • If targeted to poor • Example: School feeding • In emergencies • Aid can hurt • If wealthy elites profit from it • makes the problem worse • Often designed to further our national and trade interests • Directed mainly at political allies • not hungry nations http://www.bread.org/assets/images/learn/food-aid.jpg

  16. http://static.flickr.com/51/189662626_257b15004f_o.jpg

  17. Aid Policies • Have been used as a lever • to impose “structural adjustment” on foreign trade policies • If foreign countries do not open up markets • or reduce subsidies as directed by U.S. • Aid may stop • Designed to create new markets • foster dependence on U.S. grain • Korea http://ecx.images-amazon.com/images/I/5111439M5NL._SL500_AA240_.jpg

  18. Aid Policies • When aid is given as free grain • undermines prices for farmers • driving them out of business • Military aid can lead to armed conflicts • that generate hungry people • Well-off divert aid to help themselves • further widening gap between haves and have-nots http://www.wfp.org/img/newsroom/afghanistan/310/dscn0678.jpg

  19. U.S.Agency for International Development (USAID) • Started with Marshall Plan after WWII • Principal U.S. foreign aid agency to help countries: • Recover from disaster • Escape poverty • Democratic reforms • Partnership with • 3,500 U.S. businesses • 3,000 Organizations • $8.8 Billion USAID in Uganda

  20. U.S. Foreign Aid • U.S. gave $28 billion (2007) • Largest Donor in world • Less generous based on capacity to give (GNP) • < 0.22% Federal Budget • Majority think U.S. Aid is 20X more http://news.bbc.co.uk/nol/shared/spl/hi/pop_ups/05/business_aid_and_development/img/1.jpg

  21. U.S. Foreign Aid Budget http://farm3.static.flickr.com/2389/2429946098_2f24950561.jpg

  22. U.S. Generosity • 2007 Government Aid: • $28 billion • 2007 Private giving • $93 billion • $61 billion: private payments to family members • 2007 Private Lending, Investment • $69 billion http://photos.state.gov/libraries/usinfo-photo/39/week_4_0507/052507-AidChart_en_200.jpg

  23. Third World Debt • Forgiving third-world debt • would help countries become self-sufficient • Honduras annual debt payments • exceed amount spent on health and education combined • Total debt payments • greater than foreign aid and foreign investment combined http://bloodbankers.typepad.com/submerging_markets/chart_intro.1.%20Growth%20of%20the%20Debt.jpg

  24. http://www1.worldbank.org/devoutreach/spring01/images7/hipc_map_7.gifhttp://www1.worldbank.org/devoutreach/spring01/images7/hipc_map_7.gif

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