Trade Insulation as Social Protection

Do, Quy-Toan ; Levchenko, Andrei A. ; Ravallion, Martin

World Bank, Washington, DC

关键词: ADVERSE SELECTION;    AGGREGATE DEMAND;    AGGREGATE SUPPLY;    AGRICULTURAL ECONOMICS;    AGRICULTURE;   

DOI  :  10.1596/1813-9450-6448
RP-ID  :  WPS6448

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

In a world with volatile food prices,countries have an incentive to shelter their populationsfrom induced real income shocks. When some agents are netfood producers while others are net consumers, there isscope for insurance between the two groups. A domesticsocial protection scheme would therefore transfer resourcesaway from the former group to the latter in times of highfood prices, and do the reverse otherwise. This paper showsthat in the presence of consumer preference heterogeneity,implementing the optimal social protection policy canpotentially induce higher food price volatility. Such policyindeed generates a counter-cyclical demand shock thatamplifies the effects of the underlying food shortage. Theresults call for a reassessment of food stabilizationpolicies. In particular, the authors urge caution againstthe systematic condemnation of trade insulation practices.