The Impact of Food Aid on Food Subsidies in Recipient Countries

A model in which policy makers maximize a weighted welfare function of producer, consumer, and taxpayer groups is applied to explain the effects of food aid receipts on food policies in the countries receiving food aid. Consumer subsidies for wheat in nine countries receiving food aid are examined during the 1955-83 period. Econometric results indicate food aid increases domestic food subsidies in the recipient countries, but that other factors (development, country-specific factors) are more important in determining subsidy level.