New York Times: Ending Famine, Simply by Ignoring the Experts
LILONGWE, Malawi — Malawi hovered for years at the brink of famine. After a disastrous corn harvest in 2005, almost five million of its 13 million people needed emergency food aid.
But this year, a nation that has perennially extended a begging bowl to the world is instead feeding its hungry neighbors. It is selling more corn to the World Food Program of the United Nations than any other country in southern Africa and is exporting hundreds of thousands of tons of corn to Zimbabwe.
In Malawi itself, the prevalence of acute child hunger has fallen sharply. In October, the United Nations Children’s Fund sent three tons of powdered milk, stockpiled here to treat severely malnourished children, to Uganda instead. “We will not be able to use it!” Juan Ortiz-Iruri, Unicef’s deputy representative in Malawi, said jubilantly.
Farmers explain Malawi’s extraordinary turnaround — one with broad implications for hunger-fighting methods across Africa — with one word: fertilizer.
Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have periodically pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers. But after the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached. …
This article is a wonderful case study for thinking about how to nurture prosperity. Free markets and exchange are essential to long-term prosperity. But what is repeatedly overlooked by Western aid organizations is the economic "eco-system" of capital markets, infrastructure, property rights law, societal values, and other institutions that must exist for markets to flourish. To take away fertilizer subsidies and expect markets to emerge magically is to make the erroneous assumption that a free market is simply the absence of government. It isn't. It is an organic web of related institutions and values. It is like an NFL team bringing in a rookie quarterback. Putting him through drills for a couple of weeks and then, without providing him a playbook, any equipment, or ever introducing him to anyone else on the team, send him into the game declaring you have freedom from any restraints of being a good quarterback. Go and succeed!
The "Free Market Economy: Extreme Makeover Edition" of the World Bank is foolish, but many World Bank critics' use of these fiascos is equally foolish. They conclude that market economies don't work, so we must turn to perpetual management of economies. The issue isn't that market economies don't work but rather that market economies cannot be instantly erected. They have to be nurtured and grown.
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