Sunday, December 02, 2007
Subsidies save the day
Lest anyone accuse me of being some sort of capitalist monster, I'd like to recommend a read of this article about ending famine in Malawi by subsidizing fertilizer. Sure my "friends" at the World Bank may have recommended against them, but a good harvest is often more efficient than a stronger fertilizer industry, especially if no one actually works in the fertilizer industry. I haven't sat down and worked it out, but I'd think that there were probably externalities here that would have recommended subsidy, if someone had thought a little harder about the problems of Malawi instead of giving the standard line, which is the apparent situation.
Labels: economics
