Saturday, 17 May 2008

Dani Rodriks on food prices

Even Dani Rodrik makes sense once in awhile,
I must say that I do not quite understand the argument of those who criticize the earlier liberalization. It seems to me odd to fault the World Bank for advice some 15 years ago to eliminate import protection--so that domestic prices could come down at the time--while at the same time complaining about high prices now, even with the benefit of hindsight. If developing countries had all kept their import protection, the global supply of food would have been lower today, not higher. (That is because import protection would have led global production to be reallocated from efficient exporters to inefficient importers.) If you are for self-sufficiency, you must be willing to live with high prices.
This comes from a blog posting under the title Does the food price crisis enhance the case for self-sufficiency? Rodrik's answer: No.

No comments: