Is this the most evil Aid program in the world?

U.S. Food Aid has long had a dirty name in development circles. Whether you prefer see it as a giant exercise in Corporate Welfare or a transparent sop to farm state senators, one thing is clear: the program is more concerned with shifting grain surpluses (in gringo ships, of course) than with feeding the world’s hungry.

Now, research by Nathan Nunn and Nancy Qian just published in the hyper-prestigious American Economic Review shows it’s even worse than we thought.

U.S. Food Aid kills. In the actual bullet-holes-in-bodies sense.

How? You’ve heard of the butterfly that flaps its wings in Brazil and causes a rain storm in North Dakota. Turns out that rain storm leads to a bumper U.S. wheat harvest, which U.S. AID ships out to Africa, where a warlord steals it, sells it, and uses the money to buy weapons and kill people.

Nunn and Qian start with the (standard) observation that the key determinant of U.S. aid shipment volumes for wheat have little to do with conditions on the ground in recipient countries. Instead, food aid closely track wheat production in the U.S.: a good harvest in the mid-west is inevitably followed by a spike in food aid shipments the following year.

Their strategy is to identify the impact of wheat aid shipments in a given year on the incidence of civil conflict in recipient countries. Some whiz-bang econometrics later they conclude that, on average, “an increase in US food aid increases the incidence and duration of civil conflicts.” The more it rains in the mid-west, the more violence there is in very poor countries.

The deeper you get into the weeds, the hairier this story gets:

The amount of theft can even exceed the value of the food, since convoy vehicles and other equipment are also stolen. In 2008, MSF Holland, an international aid organization working in Chad and Darfur, noted the strategic importance of these goods, writing that these “vehicles and communications equipment have a value beyond their monetary worth for armed actors, increasing their capacity to wage war” (Polman 2010, p. 105).

The research finds no impact of U.S. Food Aid on local food production or prices. Let me just repeat that, because it’s actually quite staggering: flooding a conflict area with free American wheat does not cause local food prices to go down. Nunn and Qian do note that the available data on this is limited – still, that’s amazing.

On the one hand this is “good”, in that it suggests aid may not lead to agricultural disinvestment or to farmers reallocating their labour to armed conflict due to agricultural prices collapsing (the traditional case against aid).

On the other hand, it’s hard to see what possible use Food Aid can be at alleviating hunger if it leaves food prices where they were before. It suggests the scale of Food Aid diversion in conflict areas is so vast that all it does is bolster the resource base of the parties to the conflict, without so much as a cursory bump to food availability.

What intrigues me is the Limited Access Orders reading to this evidence – something that, to be clear, Nunn and Qian don’t really go into. In an LAO reading, developing country conflicts are usually driven by failures in elite pacts over how to divvy up rents. Food aid is, in a way, the ultimate rent: free food that drops from the sky (sometimes literally.) It’s just more stuff to squabble over.

And I know it’s true, because I read it in the AER.