Does Food Aid Really Have Disincentive Effects? New Evidence from Sub-Saharan Africa

Posted: 8 Oct 2004 Last revised: 4 Jan 2012

See all articles by Awudu Abdulai

Awudu Abdulai

Consultative Group on International Agricultural Research (CGIAR); University of Kiel - Department of Food Economics and Consumption Studies

Christopher B. Barrett

Cornell University - Charles H. Dyson School of Applied Economics & Management

John Hoddinott

Cornell University, Dyson School of Applied Economics and Management, Students

Date Written: June 1, 2004

Abstract

There exists negligible empirical evidence to either refute or confirm the pervasive belief that food aid has significant disincentive effects on recipient food production at both micro and macro levels. This paper aims to fill this void. Using household level data from rural Ethiopia, we demonstrate that while simple descriptive statistics and naïve regressions indeed appear consistent with the disincentive effects hypothesis, those results appear to result from failure to control properly for endogeneity associated with targeting-related placement effects. Once one controls properly for such effects, no empirical support remains for the hypothesis that food aid creates disincentive effects. The macroeconomic evidence yields similar findings. Applying vector autoregression methods to a 1970-2000 panel of national-level data, with proper controls for country-specific unobservables, disasters and rainfall anomalies, we similarly find that food aid has no disincentive effect on food production. If anything, it has proved stimulative in sub-Saharan Africa.

Suggested Citation

Abdulai, Awudu and Barrett, Christopher B. and Hoddinott, John, Does Food Aid Really Have Disincentive Effects? New Evidence from Sub-Saharan Africa (June 1, 2004). World Development, Vol. 30, No. 10, 2005. Available at SSRN: https://ssrn.com/abstract=601243

Awudu Abdulai

Consultative Group on International Agricultural Research (CGIAR) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

University of Kiel - Department of Food Economics and Consumption Studies

Olshausenstrasse 40
24098 Kiel, 24098
Germany

Christopher B. Barrett (Contact Author)

Cornell University - Charles H. Dyson School of Applied Economics & Management ( email )

315 Warren Hall
Ithaca, NY 14853-7801
United States
607-255-4489 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://aem.cornell.edu/faculty_sites/cbb2/

John Hoddinott

Cornell University, Dyson School of Applied Economics and Management, Students ( email )

Ithaca, NY
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
1,641
PlumX Metrics