The State of Food Security and Nutrition in the World 2024

S5.1 Methodological notes to Section 5.1 of the main report

Countries’ ability to access financing is grouped into three categories: limited, moderate and high ability to access financing. Four major variables were included in the assessment:^j national income, debt sustainability, governance quality and digitalization, as shown in Table S5.1.

TABLE S5.1OVERVIEW OF METHODOLOGY for Section 5.1 OF THE MAIN REPORT

NOTES: n.a. = not applicable. Please note that two upper-middle-income countries are assessed with the LIC DSF indicator. These countries are treated as lower-middle-income countries while applying the methodology.
SOURCE: Authors' (FAO) own elaboration.

One indicator was used for national income:

1. World Bank country and lending groups: Countries are grouped in three clusters (low income, lower-middle income and upper-middle income), based on gross national income per capita as published by the World Bank.⁷²

Three indicators were considered for the debt sustainability variable:

1. Debt Sustainability Framework for Low-Income Countries (LIC DSF): The Debt Sustainability Framework (DSF) is the main tool for multilateral institutions and other creditors to assess risks to debt sustainability in LICs and LMICs. The framework classifies countries based on their assessed debt-carrying capacity, estimates threshold levels for selected debt burden indicators, evaluates baseline projections and stress test scenarios relative to these thresholds, and then combines indicative rules and staff’s judgement to assign risk ratings of debt distress.⁷³
2. Sovereign Risk and Debt Sustainability Framework for Market Access Countries (MAC SRDSF): Debt sustainability for market access countries refers to the ability of a country to manage its debt obligations without compromising its long-term economic growth prospects or facing the risk of default. Market access countries are those nations that have access to international financial markets for borrowing capital through the issuance of bonds or other debt instruments. Debt sustainability assessments typically involve analysing a country’s current debt levels, its ability to generate sufficient revenue to service its debt, the sustainability of its fiscal policies, the structure of its debt (maturity profile, currency composition, and so on), and its capacity to respond to adverse shocks. The aim is to ensure that a country's debt burden remains manageable over time, allowing it to meet its debt obligations while also fostering sustainable economic development.⁷⁴
3. Short-term debt (% of total reserves): Short-term debt includes all debt that has an original maturity of one year or less and interest in arrears on long-term debt. Total reserves include gold.^{75, 76}

For the governance variable, five out of six indicators of the Worldwide Governance Indicators (WGI)^k were used:^l

1. Voice and accountability: This considers the perception of the extent to which a country’s citizens can participate in the public domain, e.g. ability to elect their government, and freedom of expression and association.⁷⁸
2. Government effectiveness: This captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies.⁷⁹
3. Regulatory quality: This captures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.⁸⁰
4. Rule of law: This considers the confidence that citizens have in society’s rule, particularly contract enforcement, property rights and the functioning of police and courts.⁸¹
5. Control of corruption: This captures perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as “capture” of the state by elites and private interests.⁸²

For the digitalization variable, the World Bank’s Digital Adoption Index (DAI) was used. The DAI is an index with global coverage that measures the adoption of digital tools in three dimensions: people, government and business.⁸³

The country groups were created following these steps (please see Table S5.1 for details):

1. The income groups are assigned to each level (limited, moderate and high ability). LICs are placed in the limited group, LMICs in the moderate group and UMICs in the high group.
2. The results are compared to the debt composite indicators (LIC DSF for LICs and MAC SRDSF for LMICs and UMICs), and countries are moved one ability’s category above or below depending on how they are assessed (see Table S5.1). However, no UMIC is placed in “limited” and no LIC in “high”.^m

For countries for which data are not available for either of the two debt indicators (LIC DSF and MAC SRDSF), an alternative method was implemented, following the steps shown in Table S5.1.

1. The levels of ability to access financing were assigned to the income groups following the same criteria as for the main method.
2. For the debt indicator, the short-term debt as a percentage of national reserves was used. Following the Guidotti-Greenspan rule,ⁿ a country with a level above 100 percent is moved one category below (high to moderate for UMICs, moderate to limited for LMICs).
3. For governance and digitalization, the country’s index for each of the five governance indicators and the digitalization index are compared against the fourth quartile of the index for the sample of countries of its own country income group (e.g. an LMIC is compared against the fourth quartile of the LMIC group). If a country is assessed above the fourth quartile for all indicators, it is moved up to the ability category above.