Home / Politics / Policy /  Increase in incomes do not guarantee nutritional diets

Higher wealth and education are no guarantees of better infant and young child feeding (ICYF) practices. That’s because of a perverse status bias in choosing food items for children. A World Bank paper by Susmita Gupta and others shows this in the case of Bangladesh. The paper has tried to answer why ICYF practices remain unsatisfactory for one-third of children in the highest wealth quintile. It finds that richer families substitute fish with meat and eggs in children’s diets. While meat and eggs are more expensive than fish, they are inferior in nutritional value. This is especially true in the case of children who derive many minerals from fish in addition to protein. The authors underline the importance of nutrition educational programmes to deal with such problems.

Also Read: The Socioeconomics of Fish Consumption and Child Health in Bangladesh

The results of a field experiment in Bangladesh suggest that rural emigration is beneficial to the broader rural economy. A National Bureau of Economic Research (NBER) paper by Agha Ali Akram from Evidence Action and co-authors explores the implications of the field experiment conducted across 133 villages. The researchers incentivized villagers to temporarily emigrate for work by subsidizing their transport costs, leading to a rise in the village emigration rate from 35% to 65%. The researchers observed that the move increased rural incomes on the whole, and not just from the additional income earned in cities. The decreased availability of agricultural workers resulted in an increase in the wage rate by 4.5-6.6%. The researchers argue that the results should help to check anti-migration bias in policy circles and in governments.

Also Read: Effects of Emigration on Rural Labor Markets

According to a new NBER paper by Christina D. Romer and David H. Romer from the University of California, Berkeley, countries lacking in monetary and fiscal policy space are likely to suffer the most when struck by a financial crisis. The authors examine financial distress in 24 advanced economies over the period 1976-2012. They find that GDP falls much less in countries that have the space to pursue macroeconomic, particularly fiscal policy, aggressively. For example, Japan, which faced a crisis in the 1990s, was already at the lower limit of the policy interest rate, and had one of the highest debt-to-gross domestic product (GDP) ratios in the world. Norway, which experienced a crisis around the same time, had a nominal policy rate close to 10%, and negative net debt. Norway was able to recover much faster. The findings point to the possibility that even in the aftermath of a financial crisis, policymakers can control the direction of their economies.

Also Read: Why Some Times Are Different: Macroeconomic Policy and the Aftermath of Financial Crises

Writing in the Economic and Political Weekly, Nidhi Aggarwal, a researcher at the Indira Gandhi Institute of Development Research, and co-authors point to lessons offered by Karnataka’s pioneering attempt at reforming agricultural output markets. Given that the union government is working to integrate 585 regulated markets across India through a single electronic market, these insights offer a chance of correcting problems plaguing agricultural marketing in India. According to the authors, for reforms to be successful, they need to address three aspects: institutions that shape markets, incentives to encourage participation, and a robust information technology (IT) infrastructure to support the trading platform. Without legal reforms to the agricultural produce market committees, of states, a unified market won’t be possible. For the online market to work, traders should be eager to place bids in far-off mandis. A new role should be invented for commissioning agents, who would otherwise have an incentive to undermine the new system.

Also Read: The Long Road to Transformation of Agricultural Markets in India: Lessons from Karnataka

How can governments combat the adverse effects of globalization, especially job polarization and within-country inequality? Writing in VoxEU, Sergei Guriev, chief economist at the European Bank for Reconstruction and Development, and co-authors list a set of policies to tackle globalisation’s challenges. They posit that given the increased speed of change in labour markets, governments need to invest in re-skilling and life-long learning. Tax compliance needs to be enhanced to better fund social security and redistribution programmes. The authors call for investment in financial literacy, alongside action against money laundering. They urge transparency in competition, and argue against the capture of the media by powerful interests. Greater international co-operation is required to tackle problems of a global nature such as migration, they say.

Also Read: Making globalisation more inclusive: A way forward

Economics Digest runs weekly, and features interesting reads from the world of economics.

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