The impact of governance and capital flows on food and nutrition security and undernourishment: further evidence from Sub-Saharan Africa

The Sustainable Development Goal-2 to “end hunger, achieve food security and improved nutrition and promote sustainable agriculture” has received a lot of attention in recent years as part of the 2030 Agenda. At the same time, there exists a complex interaction between institutions, capital flows, and food and nutrition security. In this paper we estimate a series of dynamic panel data models to examine the impact of governance quality and capital flows (in the form of ODA, FDI, Portfolio Equity and Remittances) on food security, nutrition security and undernourishment by using panel data for 25 SSA countries over the period 1996 to 2018. One of the key contributions of the paper is the use of both aggregate and disaggregated capital flows to examine the impact on both food and nutrition security, a dimension that has been surprisingly neglected in most of the relevant literature. We combine this with the interaction of various types of capital flows with a governance quality index we constructed from various governance indicators and in order to examine also the impact of institutions on the overall nexus. We also employ a dynamic estimation methodology in the form of Difference-GMM and System-GMM estimators along with various misspecification diagnostics to deal with possible endogeneity issues. Finally, we also examine the impact not only on food and nutrition security but also on undernourishment Our findings clearly demonstrate the importance of a disaggregation approach and reflect on earlier work regarding the role of governance quality in the overall nexus between external capital flows and various measures of food and nutrition security which leads, and as expected, to an interesting variation in the results obtained, depending on the type of capital flows and the interaction with the governance indicators.