Working Paper: CEPR ID: DP9086
Authors: Kym Anderson; Signe Nelgen
Abstract: The recent upward spike in the international price of food led some countries to raise export barriers. As in previous price spike periods, that response by some food-exporting countries was accompanied by a lowering of import restrictions by numerous food-importing countries. Both actions exacerbate the international price spike. This paper provides new evidence n the extent of change in domestic relative to international prices in both groups of countries, and compares it with responses during previous food price spike periods. Stronger WTO disciplines on export restrictions are needed to limit government responses that exacerbate such price shocks.
Keywords: Commodity price stabilization; Distorted incentives; Domestic market insulation
JEL Codes: F14; Q17; Q18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Export restrictions (F14) | International food prices (Q11) |
| International food prices (Q11) | Export restrictions (F14) |
| Export restrictions + Reduction of import tariffs (F14) | International price increases (P22) |
| Changes in trade restrictions (F14) | Increase in rice prices (Q11) |
| Changes in trade restrictions (F14) | Increase in wheat prices (Q11) |
| Changes in trade restrictions (F14) | Increase in maize prices (Q11) |
| Domestic market insulation policies (L59) | International price fluctuations (F31) |
| Export taxes (H29) | Domestic prices (P22) |
| Food-importing countries easing import restrictions (F14) | International prices (P22) |