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196 ROBERT PAARLBERG


more likely to be fed directly to children in the household and any income they bring in is more likely be invested in the health of children. NGOs in Bangladesh have also found many ways to partner with the govern-


ment when delivering cross-sector services to targeted populations. BRAC, a rural development organization, uses resources provided by the Bangladesh Bank to pro- vide low-interest loans to tenant farmers who are often excluded from credit markets for lack of collateral security. BRAC also uses its village organization systems to deliver agricultural extension services to the rural poor (for example, by encourag- ing dietary diversification through vegetable production) and also partners with the Bangladesh Rice Research Institute and the Bangladesh Agricultural Research Institute to conduct applied agricultural research.


Stage Three: Private-Sector Expansion and a Growing Need for Regulation During Stage Three in the dietary transition, the leading challenge of good gover- nance shifts from public investment and public service delivery to public regulation. This is due to the much larger role now being played by private investors and large corporations—such as food, agribusiness, and pharmaceutical companies—as product manufacturers and service providers. At this third stage in the dietary transition, the agricultural sector will be highly productive, highly diverse, and suf- ficiently capitalized to secure most of the investment, lending, and research support it needs from private sources. Public research and extension systems will remain active, but with a role steadily shrinking relative to private companies in the seed, chemical, and machinery sectors. In the nutrition and health sectors, the higher affluence of most citizens will likewise be enough to stimulate private investments to deliver a much wider variety of healthy foods and medical services. The abundance of affordable food in these societies relative to income, however, when accompanied by transitions away from physical labor and structured eating, will eventually trigger a new diet-related threat to health: a growing prevalence of obesity. In Stage Three countries, the most important cross-sector governmental task


shifts from service delivery to regulation, especially public health and safety regula- tion of farm practices, food companies, food retailers, restaurants, pharmaceutical companies, hospitals, and medical insurers; environmental safety also needs be monitored. As always, it will help if regulatory policy actions in one sector take into account positive or negative synergies with other sectors. Yet the major risk at Stage Three is not an inattention to cross-sector linkages but rather the political “capture” of regulators by the private industries being regulated (Stigler 1971). We can illustrate this danger by considering the weak regulatory response of the US government to date to the country’s worsening obesity crisis, due to private


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