Policy, Growth and Food Security: Institutions, Subsidies, Population
Lecture 13: Policy Frameworks and Public Health
Lecture 13: This lecture analyzes policy frameworks by asking, “Who should do what?” It compares the roles and limits of four key actors:
- Families/Individuals — best at knowing needs and showing devotion; limited by resources.
- Communities — best at local coordination and devotion; limited by scale.
- Governments — best at coercion and large-scale coordination; limited by borders.
- International organizations — best at cross-boundary issues; limited by enforcement power.
Mainstream economists argue that governments should intervene specifically during market failures. These failures commonly take the form of:
- Externalities — unpriced side effects such as pollution or the public-good aspects of vaccines.
- Information asymmetry — knowledge gaps, for example the doctor–patient relationship described by Ken Arrow.
- Natural monopolies — industries with high entry costs and important economies of scale.
The lecture applies these concepts to public health, illustrating how different actors must coordinate roles — for example, in providing sanitation infrastructure, promoting breastfeeding awareness, and running vaccination campaigns — to break the cycle between illness and malnutrition.
Lecture 14: Growth, Redistribution and Institutions
Lecture 14: This lecture analyzes the debate between economic growth (increasing the “cake” or GDP) and redistribution as primary ways to alleviate poverty. It critiques the Washington Consensus, which promoted market orientation and trade liberalization, by contrasting different historical strategies.
Examples include South Korea, whose successful export-led growth was driven in part by government subsidies, and India‘s earlier “go-slow” period of import substitution and nationalization. A major focus is placed on institutions — defined by Douglass North as the “rules of the game” — and on the work of Acemoglu, Johnson, and Robinson, who argue that settler mortality rates shaped whether colonizers created productive or extractive institutions.
Because growth does not always resolve undernutrition, the lecture outlines redistribution strategies such as:
- Progressive taxation
- Land redistribution (with discussion of failures such as in Zimbabwe)
- The choice between cash transfers (flexibility) and food aid (direct nutrition support).
Finally, it covers foreign aid, contrasting the pro-aid perspectives of Jeffrey Sachs with the skepticism of William Easterly and Dambisa Moyo. It also distinguishes the FAO (focused on agriculture) from the WFP (focused on crisis relief).
Lecture 15: Food Subsidies, Rationing and Targeting
Lecture 15: This lecture analyzes food subsidies as a primary method of redistribution. Using supply and demand diagrams, it demonstrates how government intervention disrupts market equilibrium (where supply meets demand).
If the government mandates a low consumer price (for example, Price = 2), it creates excess demand (a shortage). To resolve this, the government must procure grain from farmers at the higher price necessary to produce that quantity — denoted P_d — and resell it at the low price. The difference (P_d − 2) represents the per-unit subsidy. While this ration system supports both farmers and consumers, it faces significant challenges such as corruption among dealers and rotting food caused by poor storage and misaligned accounting incentives.
The lecture contrasts rationing with food stamps (citing Banerjee et al.‘s study in Indonesia), which improve targeting and reduce costs but expose the poor to price fluctuations. In-kind transfers (analyzed by Gadenne et al. in India) serve as insurance against inflation and often ensure better caloric intake.
Finally, the lecture discusses strategies for targeting the poor, such as self-targeting through inferior goods or conditional transfers like mid-day meals and food-for-work schemes.
Lecture 16: Population Policy and Fertility Transition
Lecture 16: This lecture examines population policy and the economic determinants of family size, observing that fertility initially rises with income (due to improved child survival) but ultimately falls as nations develop. This shift is driven by the demographic model, where modern social safety nets such as pensions replace the traditional reliance on children for old-age support.
The lecture emphasizes the trade-off between quantity and quality, where parents choose to invest more resources in fewer, better-educated children rather than having large families — especially when labor market opportunities increasingly reward high skills. A central theme is the impact of women’s education, which lowers fertility by increasing labor force participation, delaying marriage, and empowering women with greater decision-making power and knowledge of options. Additionally, the prevalence of modern contraceptives plays a crucial role, though significant unmet needs persist in developing regions. These forces ultimately divide the world into nations above or below the replacement rate of 2.1 births per woman.
Lecture 17: Food Supply, Microfinance and Future Risks
Lecture 17: This lecture outlines mechanisms to improve food supply, focusing heavily on microfinance as a tool to overcome information asymmetry via joint-liability groups that replace the need for collateral. This model was championed by Mohammed Yunus and the Grameen Bank.
While initially celebrated, later evidence — including randomized controlled trials and reports of debt traps in Cambodia — suggests microfinance often provides consumption smoothing rather than a guaranteed escape from poverty. Government-backed non-profit models like Jeevika in India have achieved massive scale through self-help groups.
The lecture also evaluates broader supply-side levers such as foreign investment in land and technological adoption, alongside agri-environmental policies that use taxes to curb negative externalities (like pollution) and subsidies to encourage positive ones.
Finally, the future outlook is framed by the “Ps”:
- Prosperity
- Population
- Productivity
- Pollution
- Price
- Policy
- Pandemics
The lecture contrasts the Establishment View (that technology will solve scarcity as population falls) with the Anti-Establishment View (that environmental limits and climate change require immediate, radical action).