World Bank economists have warned countries against imposing price controls and restricting food exports as a means of arresting rising domestic food prices.
WORLD Bank economists have warned countries against imposing price controls and restricting food exports as a means of arresting rising domestic food prices.
“A food crisis on the scale of 2008 may or may not repeat itself in 2022. But whether it does or it does not, policymakers across the globe would do well to avoid the mistakes of the past,” the economists said. However, since the pandemic, the economists said the onset of the Russia-Ukraine war, EMDEs have implemented these policies. One caveat, the economists said, is the difficulty in removing these policies which could lead to larger economic “distortions.”
The authors added: “At times of rapidly rising food prices, a less distortionary policy response to support the poorest households is through targeted social protection programs that are both more progressive and, possibly, less damaging to government finances.”