Academic Sources: Hendrix and Haggard on Food Prices and Protest
Between 2000 and 2011, prices for most globally traded commodities more than doubled. Since cresting in early 2011, oil and industrial metals prices then halved, raising question about whether North Korea’s trade boom—led by raw material exports--was fragile. Unlike other commodities, however, global food prices have followed a different trajectory. While down from near historic highs in 2007-08 and 2011, they are still higher than at any point in the previous three decades. As recent data collated by my colleague Marc Noland again shows, even a closed economy such as North Korea is not entirely immune from such trends.
The economic effects of higher food prices are clear: since 2007, higher prices have put a brake on two decades of steady process in reducing world hunger. But the spikes in food prices over the last decade have also thrust food issues back onto the security agenda, particularly after the events of the Arab Spring. High food prices were one of the factors pushing people into the streets during the region-wide political turmoil that began in late 2010. Similar dynamics were at play in 2007-08, when near-record prices led to food-related protests and riots in 48 countries.
To what extent might high or rising food prices be a source of political instability, including in countries like North Korea? In a recently published article in the Journal of Peace Research, Cullen Hendix and I studied the relationship between food prices and urban unrest in a panel of African and Asian cities over the 1961-2010 period. Our objective was to tease out how political institutions might affect the propensity for mass mobilization and protest. Although North Korea is not included in the dataset, the findings are relevant to projections about regime stability in the country.
Politics and policy might affect the relationship between food prices and protest through two channels. The first is the extent to which governments shield urban consumers from high global prices. Developing country governments often subsidize food purchases, especially those of urban dwellers, shifting welfare from rural producers to urban consumers. The mechanisms for doing this in North Korea are a little different, but surprisingly similar. The elite in Pyongyang has access to a ration system that is more generous—and more regular—than that in smaller cities or in the countryside.
But this observation raises the second-order question of the conditions under which governments will subsidize urban consumers in the first place. We hypothesized that autocratic governments were more likely to shield urban consumers. While urban dwellers can riot even in the absence of elections, rural dwellers have fewer channels through which their interests can be represented.
Protest is also affected by the political opportunity structure: the opportunities for civil society to organize and mobilize. Famine in North Korea may have claimed as many as a million lives during the first half of the 1990s, but no rioting or demonstrations occurred in Pyongyang. Meanwhile, food-related protests are routine in more open systems like India, where comparatively small price movements in the presence of ample stocks routinely bring trade unions into the streets.
Our empirical analysis concluded that democracies and to a lesser extent so-called competitive authoritarian regimes experience more urban unrest in times of high prices; there is no relationship between food prices and urban unrest in autocracies, which comports with the North Korean history.
However, is this outcome the result of more pro-rural policies in democracies or a more liberal environment for protest? We found that democracies and competitive authoritarian regimes did indeed enact more pro-rural food policy, including efforts to raise farmgate prices. Again, this comports broadly with the North Korean experience; were North Korea less authoritarian and centralized, we would expect that the regime would devote more attention to the rural sector, as the Chinese ultimately chose to do with transformative effect.
The Arab Spring seems to challenge our findings, since the protests reflected autocracies that failed to pacify restive urban populations. However it was not for lack of trying. Rather, the Arab Spring reflects some of the risks autocratic leaders face when attempting to insulate urban consumers from global market prices. Consumer subsidies have long been part of the “authoritarian bargain” between the state and citizens in the Middle East and North Africa, and attempts to withdraw them have been met with protest before: Egypt’s bread intifada, which erupted over an attempt to reform food subsidies, killed 800 in 1977. These subsidies explicitly encouraged citizens across the region to evaluate their governments’ effectiveness in terms of its ability to maintain low consumer prices – prices, given these countries dependence on food imports, which those governments ultimately could not control.
The North Korean regime has been much more assiduous in protecting the core of the regime in Pyongyang. And the regime might also be able to control the costs of such a policy in part by limiting access to the city itself, including its ration system. But as the Arab Spring shows, not all cases conform to the average-treatment-effect findings of panel regressions such as those in our paper. Authoritarian regimes can and do miscalculate. Were the North Korean regime to wrongly calibrate its food needs, we cannot rule out a reaction from below, our general findings notwithstanding.
Cullen Hendrix is assistant professor at the Josef Korbel School of International Studies at the University of Denver and nonresident senior fellow at the Peterson Institute for International Economics. He is the author, with Marcus Noland, of Confronting the Curse: The Economic and Geopolitics of Natural Resource Governance.
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