Impact of the political risk on food reserve ratio: evidence across countries

TL;DR

This study examines how political risk influences food reserve ratios across 75 countries from 1991 to 2019, revealing that higher political risk generally reduces food reserves and affects trade and consumption patterns.

Contribution

It provides empirical evidence on the negative impact of both internal and external political risks on food reserve ratios and related trade and consumption behaviors.

Findings

Higher political risk decreases food reserve ratios.

External risk negatively affects exports but not imports.

Internal risk reduces imports and consumption.

Abstract

Using an unbalanced panel data covering 75 countries from 1991 to 2019, we explore how the political risk impacts on food reserve ratio. The empirical findings show that an increasing political risk negatively affect food reserve ratio, and same effects hold for both internal risk and external risk. Moreover, we find that the increasing external or internal risks both negatively affect production and exports, but external risk does not significantly impact on imports and it positively impacts on consumption, while internal risk negatively impacts on imports and consumption. The results suggest that most of governments have difficulty to raise subsequent food reserve ratio in face of an increasing political risk, no matter it is an internal risk or an external risk although the mechanisms behind the impacts are different.