Annual Review of Resource Economics - Volume 9, 2017

This review is framed around the exploration of a central hypothesis: A shift in public investment toward secondary towns from big cities will improve poverty reduction performance. Of course, the hypothesis raises many questions. What exactly is the dichotomy of secondary towns versus big cities? What is the evidence for the contribution of secondary towns versus cities to poverty reduction? What are the economic mechanisms for such a differential contribution, and how does policy interact with them? We find preliminary evidence and arguments in support of our hypothesis, but the impacts of policy on poverty are quite complex, even in simple settings. The question of whether a shift in investment to secondary towns reduces poverty more is an open area for research and policy analysis.

With uninsured risk representing a major hurdle to investment, productivity growth, and poverty reduction in developing country smallholder agriculture, index-based agricultural insurance has offered the promise of overcoming the hurdles of traditional indemnity-based insurance for this context. In spite of extensive experimentation, take-up has been disappointingly low without large and sustained subsidies. We show that existing constraints on take-up can partially be overcome using revised contract designs, advanced technology for better measurement, improved marketing, and better policy support. However, because index insurance is likely to remain expensive in that context, we suggest that improved index insurance be combined with stress tolerant seed varieties and new risk-oriented savings and credit products that build on the complementarities between what can be offered by index insurance and these other instruments to cope with shocks and manage risk.

A nutrition-sensitive food system is one that goes beyond staple grain productivity and places emphasis on the consumption of micronutrient-rich nonstaples through a variety of market and nonmarket interventions. A nutrition-sensitive approach not only considers policies related to macrolevel availability and access to nutritious food, but it also focuses on household- and individual-level determinants of improved nutrition. In addition to agriculture, intrahousehold equity, behavior change, food safety, and access to clean water and sanitation are integral components of the food system. This article provides a detailed review, from an economic perspective, on the multisectoral pathways through which agriculture influences nutrition. A critical challenge is to identify and implement food and nutrition policies that are appropriate to the particular stage of structural transformation in the country of concern.