Market Responses to Anti-Hunger Policies

The way markets respond to anti-hunger policies can have considerable bearing on their effectiveness. This paper investigates market responses to various policies, including direct transfer payments, relief work, food pricing policies, public grain storage, external trade, and public information. A distinction is drawn between the transfer and risk benefits to the poor of anti-hunger policies. One of the main conclusions is that relief work can have significant transfer benefits relative to policy options, although this may require relaxation of some existing restrictions. A trade-off is also identified between the transfer and risk benefits, contingent on the performance of existing risk sharing practices and institutions. Empirical evidence is primarily for South Asia, particularly Bangladesh.