What happens when rate of increase of population exceeds food production?

Well, when the rate of increase of population outstrips rate of increase of food production, then there is a production paradox-- despite increase in food production in all regions, the number of hungry stomaches still increase! From NYT:

Scientists and development experts across the globe are racing to increase food production by 50 percent over the next two decades to feed the world’s growing population, yet many doubt their chances despite a broad consensus that enough land, water and expertise exist.

The number of hungry people in the world rose to 1.02 billion this year, or nearly one in seven people, according to the United Nations Food and Agriculture Organization, despite a 12-year concentrated effort to cut the number.

The global financial recession added at least 100 million people by depriving them of the means to buy enough food, but the numbers were inching up even before the crisis, the United Nations noted in a report last week.

Agronomists and development experts who gathered in Rome last week generally agreed that the resources and technical knowledge were available to increase food production by 50 percent in 2030 and by 70 percent in 2050 — the amounts needed to feed a population expected to grow to 9.1 billion in 40 years.

Despite an increase in technology and food production techniques, why is there still increasing hunger? Are we approaching Malthusian nightmare? Here is Greg Clark:

Thomas Malthus warned in 1798 that population pressures would forever keep food and energy scarce and incomes low. In the 200 years since, world population has grown sevenfold, to 6.7 billion. Yet food and energy have become cheaper and more abundant. Malthus's dystopia, it seemed, belonged in history's junkyard. But, suddenly, rapid growth in China and India and the consequent scramble for increasingly scarce resources has revived the Malthusian specter. By 2050, 9 billion people in a world where all have U.S. consumption standards would need eight times as much oil and five times as much food than the planet current uses. Is the future a world of $10-a-gallon gas and $20 Big Macs?

Ostrom and Nepal

2009 Nobel laureate in economics Ostrom's on CPR (via David Warsh)

"total crop yield in Nepal is frequently higher around small primitive dams built from stone, mud and trees and managed locally, than near large concrete and steel dams where irrigation users have little incentive to concern themselves with necessary dam maintenance."

It would be very interesting to read Ostrom's forthcoming book about her research in Nepal.

Two emerging giants battle: Nepal benefits

The battle between China and India for regional influence will potentially benefit Nepal. A positive externality (for Nepal) from competing economic policies for regional influence by two emerging giants.

Indian Railways has chalked out a comprehensive plan to build rail links with Nepal and Bhutan in an apparent bid to counter the recent Chinese move to build rail links in South Asia. China is building a 1,956-kilometer rail route connecting Qinghai province and Tibet with Kathmandu across the Tibetan plateau.

China is also planning to build an internal railway network in Nepal linking it to Pakistan via the Karakoram Highway and Bangladesh via Myanmar. Indian Railways proposes to build six rail links with Nepal and three with Bhutan on a priority basis. Recently, the railways has mooted a proposal to link India directly with Nepal to achieve its all-round development and enhance connectivity between the two neighboring countries.

Free articles from 2009 Nobel Prize in economics winners

Some of the papers (for free!) by Elinor Ostrom and Oliver E. Williamson here.

Here is an interesting one:

The contested role of heterogeneity in collective action: Some evidence from community forestry in Nepal

2009 Nobel prize in economics

This year’s Nobel Prize in economics went to Elinor Ostrom (the first woman to win the prize in economics) and Oliver Williamson for their work in economic governance.

Economic transactions take place not only in markets, but also within firms, associations, households, and agencies. Whereas economic theory has comprehensively illuminated the virtues and limitations of markets, it has traditionally paid less attention to other institutional arrangements. The research of Elinor Ostrom and Oliver Williamson demonstrates that economic analysis can shed light on most forms of social organization.

Elinor Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories. She observes that resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest, and she characterizes the rules that promote successful outcomes.

Oliver Williamson has argued that markets and hierarchical organizations, such as firms, represent alternative governance structures which differ in their approaches to resolving conflicts of interest. The drawback of markets is that they often entail haggling and disagreement. The drawback of firms is that authority, which mitigates contention, can be abused. Competitive markets work relatively well because buyers and sellers can turn to other trading partners in case of dissent. But when market competition is limited, firms are better suited for conflict resolution than markets. A key prediction of Williamson's theory, which has also been supported empirically, is therefore that the propensity of economic agents to conduct their transactions inside the boundaries of a firm increases along with the relationship-specific features of their assets.

Economists react:

Paul Romer

Paul Krugman says its “an institutional economics prize”

Tyler Cowen

Steven Levitt

The Economist

Brad DeLong

also, here

IPC One Pagers in one volume!

The IPC has published a collection of its popular One Pagers as a book. Very insightful and interesting short papers. Link here.

Krugman’s economic belief

Very Keynesian:

Self-interest is still the best motivator we know – or more accurately, the only consistent motivator. So I’m for market economies. But I’m for market economies with strong safety nets, with adult supervision in capital markets, with public provision of goods the private sector does badly (like basic research and much of education.) An idealized New Deal is about as far as I go.