The Effects of Macroeconomic Stability, Food Policies and Market Information Access on Food Production in East Africa Panel Data Analysis

Abstract

Unlike determinant of food production from the perspectives of inputs, there have been very few studies that comprehensively investigate the effects of policies and market information access on food production in East Africa. Using panel data from 12 East African countries spanning 1993-2022, we empirically investigate how macroeconomic instability, food policies and market access influence food production in the region. Our chosen model specifications include dynamic panel autoregressive distributed lag using comparison of three estimation techniques: pooled mean group estimator, mean group estimator and dynamic fixed effect estimator. We find that food policies like food import and food aid, and macroeconomic instability negatively influence food production in East African. Specifically, past period food production influences current food production which reveals historical persistence of food production problem in the region. However, we find mixed effects of local market information access on food production across East African. Therefore, countries in the region shall pursue prudent monetary policy to ensure macroeconomic stability, encourage food import substitutions to reduce reliance on food imports, food aid and utilizing appropriate technologies to boost market access for own production and ultimately enhance domestic production.