Public Policy

Question 1

devereux identifies 4 categories of government contribution

Answer 1

1) failure to intervene
2) malign intent
3) inappropriate policies
4) by product - war

Question 2

under competitive conditions, case in favour of cash relief strong if…

Answer 2

food prices in affected region are below world prices at the border

OR

private traders can deliver food more efficiently than aid agency

Question 3

famine policies - stabilisation

Answer 3

• public buffer stocks is a popular stabilisation policy
• stocks raised when aggregate food availability if high
• stabilising prices reduces incentives for private speculation

Question 4

when are buffer stocks ineffective

Answer 4

in competitive markets in which agents hold rational expectations of price movements

Question 5

famine policies - linking relief and development

Answer 5

• failure of both market and non-market institutions lie at heart of famine causation
• argued famines can be removed by longer-term development policies which strengthen social and economic institutions which help protect poor people from economy-wide shocks