Brookings this week released a new policy brief arguing that export restrictions imposed during supply disruptions do not resolve scarcity but shift it onto import-dependent countries, amplifying global price increases and eroding confidence in international markets as a source of resilience.
The policy brief states that governments should pursue advance commitments among trusted partners not to impose export restrictions on critical goods, and improve transparency in available supply and market capacity, to preserve international markets as a cost-effective source of resilience during crises.
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Yet export restrictions don’t solve scarcity; they redistribute it. By reducing supply available to world markets—and by obscuring the signal that higher prices provide to encourage additional production—they can amplify global price increases and increase price volatility. During the 2006-08 food crisis, export restrictions and other policies that limited supplies reaching international markets were estimated to account for roughly 45% of the increase in world rice prices and nearly 30% of the increase in world wheat prices.
Read the full policy brief: Export restrictions don’t solve scarcity, they redistribute it