Numerous theoretical and empirical studies highlight the positive effects of nutrition intake on economic growth. In order to quantify such a relationship for the purposes of policy advice, it is critical to have a clear understanding of how better nutrition intake facilitates economic growth. This book sheds light on the relationship between the central dimension of nutrition, food energy intakes and economic growth. Its results are intriguing not only for researchers but also for policy-makers and international aid agencies.
It is widely recognized that undernourishment negatively influences people’s livelihoods in a number of direct and indirect ways. Empirical studies of microeconomic agents (individuals and households) have provided evidence to demonstrate that better nutrition leads to higher levels of productivity. Undernourished children can suffer from reduced learning ability, while an undernourished labour force is constrained by lower productivity. Undernourished people in general are more susceptible to illness. As a result, widespread malnutrition most likely lowers a country’s average economic growth. This is the central theme of this book: What are the relationships between nutrition intake and economic growth? Studies in the book provide evidence that overall growth is compromised in societies that have undernourished populations, and that an increase in nutrition intake will increase economic growth.
Broca and Stamoulis argue that fighting hunger is a complement to fighting poverty. Hunger is a violation of a basic human right, and also imposes significant economic costs on society. Hence, its reduction and ultimate eradication are the most urgent tasks facing national governments, civil society and the international community. The authors raise six points as demonstrating the economic costs of hunger to society: 1) lower efficiency of labour; 2) greater susceptibility to illness; 3) risk of intergenerational transmission of poor nutritional status; 4) poor school performance of children; 5) excessively risk-averse behaviour; and 6) the cumulative impacts of these on a country’s macroeconomic performance. After showing evidence from the literature of the negative impacts of undernutrition on macroeconomic performance, the authors investigate the circumstances that make income growth pro-poor. They argue that economic growth originating in agriculture and rural non-farm (RNF) income is likely to be strongly poverty reducing, provided that it does not occur against a backdrop of extreme inequality in asset ownership, especially in ownership of land. Agriculture and RNF income are pro-poor because the majority of the poor live in rural areas where agriculture is a dominant source of income. The authors conclude that, although there is a lag, agricultural growth will be strongly poverty-reducing.
Wang and Taniguchi consider the impact of nutritional status on the growth rate of real per capita gross domestic product (GDP). In particular, they combine the per capita dietary energy supplies (DES) of a panel of 114 countries for the period 1961 to 1999. As well as running pooled regressions, the authors also divide the sample into ten- and five-year intervals in order to investigate the medium- and short-run effects. In addition, they compare across country groups within each of these time frames to discern cross-sectional performance differences. They find that, on average, the long-run real per capita GDP growth rate can be increased by 0.5 percentage points if per capita DES is increased by 500 kcal/day; however, for a subgroup of developing countries (in East and Southeast Asia) the increase in the per capita GDP growth rate could be four times greater, while in most other developing countries the effect of increased DES is either negative or negligible. The short-run effect is more likely to be insignificant or negative than the long-run effect is. The authors believe that this could be owing to a dynamic interaction between the short-run population growth effect and the long-run productivity effect. These results are robust in various econometric modelling procedures, as well as in the identity critique. Because the nutrition trap is a short-run effect, policies should aim to reduce hunger in the long run. This study shows that the presence of chronic hunger in a country is costly in terms of the long-run economic growth of that country.
A case study conducted by Ganegodage, Taniguchi and Wang investigates the relationship between nutrition intake and economic growth in an attempt to provide useful insight for FAO’s Anti-hunger Programme. Using Sri Lanka as an example, the authors address the question of how much economic growth is lost by a county that has undernourished people. Real per capita GDP, physical capital, protein intake, the openness index and the student-teacher ratio are investigated. Vector autoregressions (VARs) and impulse response functions are used in the study. VARs are used to assess the long-run equilibrium relationship between nutrition intake and economic growth, while impulse response functions are used to reveal the short-run dynamics. Results show that a 1 percent increase in protein intake will increase GDP by 0.49 percent in the long run. When this is applied at the sample mean, an increase of 176 g of protein intake per capita per year will cause an increase in real per capita GDP of 269 Sri Lanka rupees. Therefore, a 1 percent increase in real per capita GDP is associated with a 2 percent increase in protein intake in the long run. Moreover, impulse response functions reveal the short-run dynamics of real per capita GDP, protein intake and physical capital. These dynamics show that GDP responds to protein innovations relatively quickly. This quick response of GDP is attributed to the contemporaneous productivity shock, as well as to the improvement in quality of human capital. The results confirm that efforts in improving food security can have a direct impact on assisting the poor in the fight against hunger. Furthermore, it can be argued that food security has both a direct (short-term) and an indirect (sustainable) impact on economic growth.
For policy-makers in developing countries and for international aid agencies, an important conclusion from these studies is that all policies - including food aid - that enhance food security and reduce undernourishment in developing countries promote pro-poor economic growth. Policies to strengthen food security tend to focus on the humanitarian benefits; however, this collection of works is a reminder that such policies also promote economic growth.
Prabhu Pingali
Director
FAO Agricultural and
Development Economics Division
