Tuesday, August 10, 2010
Did Trade Liberalization Cause the Food Price Crisis?
Ivanic and Martin say no: on average, developing countries have protected agriculture more and more since the 1970s, rather than less. While I believe they are right, I don't find that particular line of thought overly convincing. It's fairly easy to argue that we restricted trade more since the last food crisis and as soon as we started liberalizing, up pops another one (incorrect, but easy). You have heard the story about the poor farmer who drowned in a puddle of water that, on average, was only 6 inches deep, right? He found the one spot where it was 10 feet deep.