Studying Local Markets to Improve Emergency Response

Guest post by John Schellhase, Program Assistant at the NYU Development Research Institute (DRI).

Dr. Christopher Barrett, Dr. Daniel Maxwell, and their team have developed the Market Information and Food Insecurity Response Analysis.  MIFIRA analyzes the capacities of local markets to sustain large purchases of food in times of crisis.  This work helps aid agencies choose between shipping food from overseas, providing cash transfers, or buying food locally to distribute to people in crisis.

Unfortunately, aid agencies and NGOs often neglect to systematically think about the consequences of their interventions, thus failing the Hippocratic imperative to “Do no harm.”  If enough food supplies are available in local markets, aid agencies should seek to make purchases in the region where they are distributing aid.  But if supplies are limited, large purchases by aid agencies during a crisis can drive up prices, leading to inflation and putting basic commodities out of reach for average citizens.  In other words, attempting to solve one crisis has the potential to create a new one.

The MIFIRA approach articulates a step-by-step process that allows aid agencies and governments to determine the effects of an intervention before an emergency arises.  It eliminates the excuse that the agency was just doing its best with limited information.

According to Erin Lentz, a research support specialist and Ph.D. student working with the Cornell team, many NGOs have been eager to apply MIFIRA.  She says that CARE International, who helped fund the research, and Catholic Relief Services in particular have been supportive.  EU funded agencies, the UK’s Department for International Development (DFID), and the UN’s World Food Program also use market analysis tools that have a similar theoretical background.

The laggard in adopting such tools has been USAID.  The reason is that U.S. agencies are legally obligated to prefer the purchase of American goods under the Hoover administration’s Buy America Act of 1933.  In February, USAID updated its rules to allow for more purchases from developing countries, provoking an unscrupulous pushback from its U.S.-based contractors.  The changed rules, however, sadly do not affect food aid.  The U.S. government’s approach to food purchases still reflects domestic politics more than the needs of the world’s poor.

A number of factors go into the decision-making processes of international aid donors.  In her correspondence, Ms. Lentz wrote that “availability of funds, local contexts, agency capacity, etc. can all drive (or at least complicate) response choice.”  The agencies involved – as foreign actors stepping into complex, fragile contexts – have a responsibility to clearly assess and articulate their own approaches to providing food in moments of crisis.  They must reform when they discover problems.  The MIFIRA process offers a straightforward method of improving emergency decision-making.  Aid agencies and NGOs could do far worse as they seek out tools to improve their services.

For more on the MIFIRA approach, see the list of publications here.

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About CTED

CTED, as part of the New York University Abu Dhabi Research Grant, is a multidisciplinary research lab that focuses on combining economic principles, technological advances, and human-centric design to create innovative solutions for the problems experienced in emerging regions.
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