This paper identifies nine political economy factors that influenced governments’ policy choices during the most recent global food price crisis. While the most common policy stances may be explained by a simple, welfare-maximizing model, the variety of responses and the policy failures require more complex models. Policies are favored that maintain government legitimacy and produce private benefits for the best-connected stakeholders. Policy interventions were frequently ad hoc and delayed because of lack of market information, conflicts among government agencies in all governments, and extended deliberations among competing stakeholder groups. Widespread mutual mistrust between governments and the private sector was a major challenge. Governments’ unpredictable policy behavior and lack of transparency contributed to the hoarding, speculation and inefficient business transactions they condemned in the private sector, which further contributed to low transparency and instability. Breaking this vicious circle appears to be very important to improve food policy.