Undernourishment and
Economic Growth

The Efficiency Cost of Hunger

Jean-Louis Arcand
Université d'Auvergne
Clermont Ferrand-France



Table of Contents






1. Basic Empirical Regularities

2. Robustness

3. Transmission Mechanisms

4. Conditional Response

5. Endogeneity and Structural Estimation

6. The Efficiency Cost of Hunger: a Quantitative Assessment

7. Concluding Remarks


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©FAO 2001

This paper investigates the relationship between nutrition and economic growth at the aggregate level by explaining the magnitude of the effects of undernourishment on economic growth and identifying the channels of transmission of such effects (direct effects on productivity and via impacts on health). In addition to this basic relationship, a number of other important relationships are investigated: (a) regional differences regarding the impact of under-nourishment on growth; (b) the impact that possible errors in measuring nutritional variables may have on the robustness of the estimated nutrition-growth relationship; and (c) the existence of "nutrition straps", i.e. the vicious circle of low nutrition-low economic growth-low nutrition. The basic conclusion of the paper - that undernourishment can be a serious handicap in the efforts of countries to achieve economic growth - suggests that actions taken to feed the hungry have a strong growth dimension in addition to theor humanitarian character. This paper makes a significant contribution to the literature on the factors that account for the differences in growth preformances across countries and regions.