New Economics Papers
on Agricultural Economics
Issue of 2011‒02‒12
twenty-one papers chosen by

  1. Agriculture and development : a brief review of the literature By Dethier, Jean-Jacques; Effenberger, Alexandra
  2. How Many Times Could You Replicate Polyface Farm? A Schematic Model of Ecosystem Services in Agriculture By David Simpson
  3. The Impact of Receiving Price and Climate Information in the Agricultural Sector By Adriana Camacho; Emily Conover;
  4. Valuation of Linkages between Climate Change, Biodiversity and Productivity of European Agro-Ecosystems By Ruslana Rachel Palatnik; Paulo A.L.D. Nunes
  5. Peer Effects, Fast Food Consumption and Adolescent Weight Gain By Bernard Fortin; Myra Yazbeck
  6. Engel’s Law Around the World 150 Years Later By Richard Anker
  7. The impacts of climate variability on welfare in rural Mexico By Skoufias, Emmanuel; Vinha, Katja; Conroy, Hector V.
  8. An Equilibrium Model of Habitat Conservation under Uncertainty and Irreversibility By Luca Di Corato; Michele Moretto; Sergio Vergalli
  9. Optimal grazing management rules in semi-arid rangelands with uncertain rainfall By Martin F. Quaas; Stefan Baumgärtner
  10. International Support of Climate Change Policies in Developing Countries: Strategic, Moral and Fairness Aspects By Dirk Rübbelke
  11. Policies Towards a Sustainable Use of Water in Spain By Andrés Fuentes
  12. Raising the Barcode Scanner: Technology and Productivity in the Retail Sector By Emek Basker
  13. The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices By Cross, Robin; Plantinga, Andrew J.; Stavins, Robert N.
  14. The Impact on U.S. Industries of Carbon Prices with Output-Based Rebates over Multiple Time Frames By Adkins, Liwayway; Garbaccio, Richard; Ho, Mun; Moore, Eric; Morgenstern, Richard
  15. The optimal commodity tax system as a compromise between two objectives By MUNK, Knud J.
  16. REDD in the Carbon Market: A General Equilibrium Analysis By Francesco Bosello; Fabio Eboli; Ramiro Parrado; Renato Rosa
  17. Experimentally-validated survey evidence on individual risk attitudes in rural Thailand By Hardeweg, Bernd; Menkhoff, Lukas; Waibel, Hermann
  18. Devolution and Accountability Effects in the Public Provision of Water Services in Indonesia By Catherine Rodríguez; Patricia Meirelles
  19. Matching in Rural Producer Organizations By Jean-Louis Arcand; Marcel Fafchamps
  20. Hot Stuff: Would Climate Change Alter Transboundary Water Sharing Treaties? By Ambec, Stefan; Dinar, Ariel
  21. Beyond Copenhagen: A Realistic Climate Policy in a Fragmented World By Carlo Carraro; Emanuele Massetti

  1. By: Dethier, Jean-Jacques; Effenberger, Alexandra
    Abstract: After 20 years of neglect by international donors, agriculture is now again in the headlines because higher food prices are increasing food insecurity and poverty. In the coming years it will be essential to increase food productivity and production in developing countries, especially in Sub-Saharan Africa and with smallholders. This however requires finding viable solutions to a number of complex technical, institutional and policy issues including land markets, research on seeds and inputs; agricultural extension; credit; rural infrastructure; storage; connection to markets; rural nonfarm employment and food price stabilization. This paper reviews what the economic literature has to say on these topics. It discusses in turn the role played by agriculture in the development process and the interactions between agriculture and other economic sectors; the determinants of the Green Revolution and discuss the foundations of agricultural growth; issues of income diversification by farmers; approaches to rural development; and finally issues of international trade policy and food security which are at the root of the crisis in agricultural commodity volatility in the past few years.
    Keywords: Rural Poverty Reduction,Regional Economic Development,Agricultural Research,Rural Development Knowledge&Information Systems
    Date: 2011–01–01
  2. By: David Simpson
    Abstract: There has been considerable recent interest in the idea that farms can produce both food and a variety of ecosystem services. One particularly intriguing notion is that farmers might find it in their own interest to adopt an “ecosystem services” approach to production in preference to a “conventional” approach. In the conventional approach farmers devote substantially all of their land directly to production and purchase a variety of fertilizers, pesticides, and other inputs. In contrast, if farmers preserve a substantial fraction of their land in a more-or-less “natural” condition, or restore it to such a state, the ecosystem services provided by preserved natural systems may obviate the purchase of many inputs. While private adoption of the ecosystem services approach would not result in the optimal provision of ecosystem services, given that some such services generate positive benefits on a broader scale than an individual farmer can appropriate, it is reasonable to regard the conversion of farms from a conventional to an ecosystem services approach to production as a step in the right direction toward more ecologically benign land use. In this paper I develop a simple and schematic model of land use in agriculture. I motivate the model by reference to Polyface Farm, a farm described in Michael Pollan’s 2006 bestseller The Omnivore’s Dilemma. Polyface Farm has adopted an ecosystem service approach: its owner restored more than fourth-fifths of the land he controls to a natural state. In contrast, his neighbors actively farm the great majority of their holdings. I develop a simple model that duplicates the stylized fact that farmers choose between very different production approaches. The model also predicts, however, that farmers who adopt an ecosystem services approach would reduce their production in the same proportion as they reduce the area of land they employ directly in production. This finding has an important implication for policy. While manipulation of agricultural prices or subsidies might induce some farmers to adopt an ecosystem services approach, such a strategy would be self-limiting. When one farmer adopts an ecosystem services approach in preference to the conventional approach she will reduce her output. Prices would rise in response, and the incentive for others to emulate her choice would be reduced.
    Keywords: Ecosystem services, conventional agriculture, Perfect substitures, Purchased inputs, Subsidies
    JEL: Q24 Q57 R14
    Date: 2010–10
  3. By: Adriana Camacho; Emily Conover;
    Abstract: Previous studies indicate that Colombian farmers make production decisions based on informal sources of information, such as family and neighbors or tradition. In this paper we randomize recipients of price and climate information using text messages (SMS technology). Under this experimental design we find that relative to those farmers who did not receive SMS information, the farmers that did had better knowledge of prices and the dispersion in the expected price of their crops was narrower, although we do not see a significant difference in the actual sale price. Farmers also report that text message information is useful and becomes an important source of information for sales. Even though we find significant reduction in crop loss in general and due to weather conditions, we do not find significant changes in their revenues or household expenditures.
    Date: 2010–11–11
  4. By: Ruslana Rachel Palatnik (FEEM, Department of Economics, the Max Stern Academic College of Emek Yezreel Israel, NRERC- Natural Resource and Environmental Research Center, University of Haifa); Paulo A.L.D. Nunes (FEEM and Center for Environmental Economics and Management, Department of Economics, Ca’ Foscari University of Venice)
    Abstract: It is clear that climate change involves changes in temperature and precipitation and therefore directly affects land productivity. However, this is not the only channel for climatic change to affect agro-systems. Biodiversity is subject to climatic fluctuations and in turn may alter land productivity too. Firstly, biodiversity is an input into agro-ecosystems. Secondly, biodiversity supports the functioning of these systems (e.g. the balancing of the nutrient cycle). Thirdly, agro-systems also host important wildlife species which, though not always, play a functional role in land productivity, nonetheless constitute important sources of landscape amenities. The present paper illustrates a unique attempt to economically assess this additional effect climate change may imply on agriculture. We first empirically evaluate changes in land productivity due to climatic change effect on temperature, precipitations and biodiversity. Then we estimate the economic cost of biodiversity impact on agro-systems. Our key finding is that climate-change-induced biodiversity impact on European agro-systems measured in terms of GDP change in year 2050 is sufficiently large to deepen the direct climate-change effect in some regions and to reverse it in others. Different economies show different resilience profiles to deal with this effect.
    Keywords: Climate Change, Biodiversity, Agro-Ecosystems
    JEL: D58 Q54 Q57
    Date: 2010–10
  5. By: Bernard Fortin; Myra Yazbeck
    Abstract: This paper aims at opening the black box of peer effects in adolescent weight gain. Using Add Health data on secondary schools in the U.S., we investigate whether these effects partly flow through the eating habits channel. Adolescents are assumed to interact through a friendship social network. We first propose a social interaction model of fast food consumption using a generalized spatial autoregressive approach. We exploit results by Bramoullé, Djebbari and Fortin (2009) which show that intransitive links within a network (i.e., a friend of one of my friends is not my friend) help identify peer effects. The model is estimated using maximum likelihood and generalized 2SLS strategies. We also estimate a panel dynamic weight gain production function relating an adolescent’s Body Mass Index (BMI) to his current fast food consumption and his lagged BMI level. Results show that there are positive significant peer effects in fast food consumption among adolescents belonging to a same friendship school network. The estimated social multiplier is 1.59. Our results also suggest that, at the network level, an extra day of weekly fast food restaurant visits increases BMI by 2.4%, when peer effects are taken into account.
    Keywords: Obesity, overweight, peer effects, social interactions, fast food, spatial models
    JEL: C31 I10 I12
    Date: 2011
  6. By: Richard Anker
    Abstract: <p>One of the most enduring relationships in economics is that proposed by Ernst Engel in 1857: “The poorer is a family, the greater is the proportion of the total outgo [family expenditures] which must be used for food. … The proportion of the outgo used for food, other things being equal is the best measure of the material standard of living of a population.” The 150th anniversary of Engel’s law passed in 2007. With this in mind, the present paper looks at the extent to which Engel’s law is relevant in today’s world by looking across countries at the relationship between the share of household expenditure spent on food and national income per capita. This working paper provides an empirical analysis of Engel’s law based on data for almost every country and territory in the world. This facilitates analysis of the relationship between the food share of household expenditure and national income per capita, especially how this differs by development level.</p>
    Keywords: History of economic thought, Economic history, Consumer economics, Consumption, Measurement and analysis of poverty, Household behavior
    JEL: B31 B41 D12 E21 I32 N01 N30 P46
    Date: 2011
  7. By: Skoufias, Emmanuel; Vinha, Katja; Conroy, Hector V.
    Abstract: This paper examines the impacts of weather shocks, defined as rainfall or growing degree days more than a standard deviation from their respective long-run means, on household consumption per capita and child height-for-age. The results reveal that the current risk-coping mechanisms are not effective in protecting these two dimensions of welfare from erratic weather patterns. These findings imply that the change in the patterns of climatic variability associated with climate change is likely to reduce the effectiveness of the current coping mechanisms even more and thus increase household vulnerability further. The results reveal that weather shocks have substantial (negative as well as positive) effects on welfare that vary across regions (North vs. Center and South) and socio-economic characteristics (education and gender). The heterogeneous impacts of climatic variability suggest that a"tailored"approach to designing programs aimed at decreasing the sensitivity and increasing the capacity of rural households to adapt to climate change in Mexico is likely to be more effective.
    Keywords: Health Monitoring&Evaluation,Science of Climate Change,Regional Economic Development,Global Environment Facility,Climate Change Mitigation and Green House Gases
    Date: 2011–02–01
  8. By: Luca Di Corato (Swedish University of Agricultural Sciences); Michele Moretto (University of Padova, Fondazione Eni Enrico Mattei and Centro Studi Levi-Cases); Sergio Vergalli (University of Brescia and Fondazione Eni Enrico Mattei)
    Abstract: In this paper stochastic dynamic programming is used to investigate habitat conservation by a multitude of landholders under uncertainty about the value of environmental services and irreversible development. We study land conversion under competition on the market for agricultural products when voluntary and mandatory measures are combined by the Government to induce adequate participation in a conservation plan. We analytically determine the impact of uncertainty and optimal policy conversion dynamics and discuss different policy scenarios on the basis of the relative long-run expected rate of deforestation. Finally, some numerical simulations are provided to illustrate our findings.
    Keywords: Optimal Stopping, Deforestation, Payments For Environmental Services, Natural Resources Management
    JEL: C61 D81 Q24 Q58
    Date: 2010–12
  9. By: Martin F. Quaas (Department of Economics, University of Kiel, Germany); Stefan Baumgärtner (Department of Sustainability Sciences and Department of Economics, Leuphana University of Lüneburg, Germany)
    Abstract: We study optimal adaptive grazing management under uncertain rainfall in a discrete-time model. As in each year actual rainfall can be observed during the short rainy season, and grazing management can be adapted accordingly for the growing season, the closed-loop solution of the stochastic optimal control problem does not only depend on the state variable, but also on the realization of the random rainfall. This distinguishes optimal grazing management from the optimal use of most other natural resources under uncertainty, where the closed-loop solution of the stochastic optimal control problem depends only on the state variables. Solving this unusual stochastic optimization problem allows us to critically contribute to a long-standing controversy over how to optimally manage semi-arid rangelands by simple rules of thumb.
    Keywords: environmental risk, risk management, stochastic optimal control, grazing management, rules of thumb
    JEL: Q57 D81 Q12
    Date: 2011–01
  10. By: Dirk Rübbelke
    Abstract: <br /> International transfers in climate policy channeled from the industrialized to the developing<br /> world either support the mitigation of climate change or the adaptation to global warming.<br /> From an allocative efficiency point of view, transfers supporting mitigation tend to be Pareto-improving<br /> whereas this is not very likely in the case of adaptation support. We illustrate this<br /> by regarding transfer schemes currently applied under the UN Framework Convention on<br /> Climate Change (UNFCCC) and the Kyoto framework.<br /> However, if we enrich the analysis by integrating distributional aspects, we find that<br /> international adaptation funding may help both developing and developed world. Interestingly<br /> this is not due to altruistic incentives, but due to follow-up effects on international<br /> negotiations on climate change mitigation. We argue that the lack of fairness perceived by<br /> developing countries in the international climate policy arena can be reduced by the support<br /> of adaptation in these countries. As we show – taking into account different fairness concepts<br /> – this might raise the prospects of success in international negotiations on climate change.<br /> Yet, we find that the influence of transfers may induce different fairness effects on climate<br /> change mitigation negotiations to run counter.<br /> We discuss whether current transfer schemes under the UNFCCC and the Kyoto framework<br /> adequately serve the distributive and allocative objectives pursued in international climate<br /> policy.<br />
    Keywords: adaptation, climate change, fairness, Global Environmental Facility, international climate policy, mitigation, reciprocity, transfers
    Date: 2011–02
  11. By: Andrés Fuentes
    Abstract: Spain uses its natural water resources intensively, mostly in agriculture, thanks to a highly developed dam infrastructure. The limits for extraction of natural resources have largely been reached and climate change is expected to continue lowering natural water endowments markedly in future especially in dry areas of the country. The costs of exploiting alternative supply sources on a large scale, notably desalination and recycling, remain well above water prices paid by consumers at present. The government has recognised that water policies therefore need to switch to demand management, so as to ensure that available resources are put to most efficient and priority use. Scope for water savings is substantial, especially in agriculture, where much irrigation water generates little value-added. The government has subsidised the use of more efficient irrigation technology at considerable budgetary cost, which has contributed to a modest reduction of water use in irrigation in recent years. The participatory approach in water policy governance should be extended further to stakeholders beyond the irrigation community, to include more scientists or representatives of institutions protecting local ecosystems Low water prices, combined with the free allocation of water concessions, still hamper an efficient use of water resources. Water prices will need to rise further so as to reflect service provision costs in full as well as the scarcity and environmental costs of water abstractions. Steps to better take into account water scarcity should include the progressive inclusion of market instruments, such as the tendering of water concessions as well as the elimination of some barriers to the exchange of such concessions among users. Benchmark regulation of water utilities would contribute to more efficient water supply and treatment services. Further steps need to be taken to halt excessive groundwater abstractions, including through improved monitoring and the introduction of charges on abstractions from overexploited aquifers.<P>Action en faveur d'une utilisation durable de l'eau en Espagne<BR>L’Espagne fait un usage intensif de ses ressources naturelles en eau, surtout en agriculture, grâce aux très nombreux barrages qu’elle a mis en place. L’extraction de ces ressources a dans une large mesure atteint ses limites, d’autant qu’elles devraient continuer de diminuer sensiblement à l’avenir sous l’effet du changement climatique, notamment dans les régions sèches du pays. Les coûts d’exploitation à grande échelle d’autres formes d’approvisionnement en eau, comme le dessalement et le recyclage de l’eau, restent bien supérieurs aux tarifs payés aujourd’hui par les consommateurs. Dans ces conditions, le gouvernement a admis la nécessité de recentrer la politique de l’eau sur la gestion de la demande, pour faire en sorte que les ressources disponibles soient affectées aux usages les plus efficients et prioritaires. Il existe d’importants gisements d’économies d’eau, en particulier dans l’agriculture où le rendement de l’eau d’irrigation est souvent faible. Le gouvernement a subventionné l’adoption de techniques d’irrigation plus efficientes, pour un coût budgétaire considérable, ce qui a contribué à une légère réduction de la consommation d’eau d’irrigation ces dernières années. L’approche participative dans la gouvernance de la politique d’eau devrait être étendue à un plus large éventail d’intervenants au delà du secteur de l’irrigation, dont les chercheurs et les représentants d’institutions qui protègent les écosystèmes locaux. Le bas niveau des prix de l’eau, conjugué à l’attribution gratuite des concessions, fait encore obstacle à une utilisation efficiente des ressources en eau. Les prix de l’eau devront encore augmenter afin de refléter pleinement les coûts de fourniture du service, ainsi que le coût de rareté et les coûts environnementaux des prélèvements d’eau. Pour une meilleure prise en compte de la rareté de l’eau, il conviendrait entre autres d’adopter progressivement des instruments économiques tels que la mise aux enchères des concessions et d’éliminer certains obstacles aux échanges de concessions entre les usagers. Une régulation par comparaison des compagnies des eaux contribuerait à accroître l’efficience des services de distribution d’eau et de traitement des eaux. De nouvelles mesures s’imposent pour mettre fin aux prélèvements souterrains excessifs, à commencer par une meilleure surveillance et l’instauration de redevances sur les prélèvements d’eau dans les aquifères surexploités.
    JEL: Q15 Q18 Q25
    Date: 2011–02–02
  12. By: Emek Basker (Department of Economics, University of Missouri-Columbia)
    Abstract: Barcode scanners were introduced in the 1970s as a way to reduce labor costs in stores, particularly at checkout. This paper is the first to estimate their effect on productivity. I use store-level data from the 1972, 1977, and 1982 Census of Retail Trade, matched to data on store scanner installations, to estimate scanners' effect on labor productivity. I find that early scanners increased a store's labor productivity, on average, by approximately 4.5 percent in the medium run, mostly due to a 15-17 percent increased in cashier productivity. Setup costs significantly reduced the short-run productivity effect.
    Keywords: Barcode scanners, Retail, Supermarkets, Technology, Productivity
    JEL: L81 O33
    Date: 2011–02–06
  13. By: Cross, Robin; Plantinga, Andrew J.; Stavins, Robert N.
    Abstract: We examine the value of terroir, which refers to the special characteristics of a place that impart unique qualities to the wine produced. We do this by conducting a hedonic analysis of vineyard sales in the Willamette Valley of Oregon to ascertain whether site attributes, such as slope, aspect, elevation, and soil types, or designated appellations are more important determinants of price. We find that prices are strongly determined by sub-AVA appellation designations, but not by specific site attributes. These results indicate that the concept of terroir matters economically, although the reality of terroir –- as proxied for by locational attributes –- is not significant.
    Keywords: swine, vineyard, hedonic price analysis
    JEL: C2 Q11
    Date: 2011–01–31
  14. By: Adkins, Liwayway; Garbaccio, Richard; Ho, Mun (Resources for the Future); Moore, Eric (Resources for the Future); Morgenstern, Richard (Resources for the Future)
    Abstract: The effects of a carbon price on U.S. industries are likely to change over time as firms and customers gradually adjust to new prices. The effects will also depend on the number of countries implementing the policy as well as offsetting policies to compensate losers. We examine the effects of a $15/ton CO2 price, including Waxman-Markey-type allocations to vulnerable industries, over four time horizons -- the very short-, short-, medium-, and long-runs -- distinguished by the ability of firms to raise output prices, change their input mix, and reallocate capital. We find that if firms cannot pass on higher costs, the loss in profits in a number of industries will indeed be large. When output prices can rise to reflect higher energy costs, the reduction in output and profits is substantially smaller. Over the medium- and long-terms, however, when more adjustments occur, the impact on output is more varied due to general equilibrium effects. The use of the H.R. 2454 rebates can substantially offset the output losses over all four time frames considered. We also consider competitiveness and leakage effects—changes in trade flows and changes in emissions in the rest of the world. We examine two measures of leakage: “trade-related” leakage that accounts for both the increased volume of net imports into the U.S. as well as the higher carbon intensity of these imports, and a broader leakage measure that includes the effect of increased fossil fuel consumption in countries not undertaking a carbon-pricing policy.
    Keywords: carbon price, competitiveness, input-output analysis, output-based allocations, carbon leakage
    JEL: F14 D D57 D58 H23
    Date: 2010–12–15
  15. By: MUNK, Knud J. (Faculté d'ingénierie biologique, agronomique et environnementale, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)
    Abstract: Policy analysis in applied fields such as agricultural, trade, environmental and development policy is still often undertaken within a first-best, rather than a more realistic second-best framework. The present paper seeks to contribute to changing this state of affairs by providing an intuitive explanation of what determines the optimal tax system. It derives and interprets an optimal tax formula for an economy with many goods to explain the optimal tax system as reflecting a trade-off between, on the one hand, the objective of encouraging the supply of labour to the market and, on the other hand, the objective of limiting the distortion of the marginal rate of substitution between produced goods. It illustrates this insight by a quantitative general equilibrium model which does not impose separability between consumption and leisure. The analysis clarifies issues of normalisation and deepens the insight due to Corlett and Hague (1953) that goods should be taxed according to their complementarity with leisure.
    Keywords: public economics, optimal taxation, rules of normalisation, quantitative model of optimal taxation, Antonelli elasticity of complementarity
    JEL: H2
    Date: 2010–07–01
  16. By: Francesco Bosello (Fondazione Eni Enrico Mattei, University of Milan, Euromediterranean Center for Climate Change); Fabio Eboli (Fondazione Eni Enrico Mattei, University of Venice, Euromediterranean Center for Climate Change); Ramiro Parrado (Fondazione Eni Enrico Mattei, University of Venice, Euromediterranean Center for Climate Change); Renato Rosa (Fondazione Eni Enrico Mattei, University of Venice, Euromediterranean Center for Climate Change)
    Abstract: Deforestation is a major source of CO2 emissions, accounting for around 17% of total annual anthropogenic carbon release. While the cost estimates of reducing deforestation rates vary considerably depending on model assumptions, it is widely accepted that emissions reductions from avoided deforestation consist of a relatively low cost mitigation option. Halting deforestation is therefore not only a major ecological challenge, but also a great opportunity to cost effectively reduce climate change negative impacts. In this paper we analyze the impact of introducing avoided deforestation credits into the European carbon market using a multiregional Computable General Equilibrium model – the ICES model (Inter-temporal Computable Equilibrium System). Taking into account political concerns over a possible “flooding” of REDD credits, various limits to the number of REDD allowances entering the carbon market are considered. Finally, unlike previous studies, we account for both direct and indirect effects occurring on land and timber markets resulting from lower deforestation rates. We conclude that avoided deforestation notably reduces climate change policy costs - by approximately 80% with unlimited availability of REDD credits - and may drastically reduce carbon prices. Policy makers may, however, effectively control for these imposing limits to avoided deforestation credits use. Moreover, avoided deforestation has the additional positive effect of reducing carbon leakage of a unilateral European climate change policy. This is good news for the EU, but not necessarily for REDD regions. Indeed we show that REDD revenues are not sufficient to compensate REDD regions for a less leakage-affected and more competitive EU in international markets. In fact, REDD regions would prefer to free ride on the EU unilateral mitigation policy.
    Keywords: Forestry, Avoided Deforestation, Climate Change, Emission Trading, General Equilibrium Modelling
    JEL: D58 Q23 Q54
    Date: 2010–11
  17. By: Hardeweg, Bernd; Menkhoff, Lukas; Waibel, Hermann
    Abstract: This study validates a survey-based measure of general risk attitude by an incentive compatible experiment among more than 900 participants in rural Thailand. The survey measure of self-assessed risk attitude provides a useful approximation of the experimentally derived risk attitude. This holds when we add various socio-demographic control variables to the survey-experiment-relation which are available from the representative household survey and which are related to risk attitude in plausible ways. The survey measure also predicts individual behavior towards risk in other cases; the survey measure even outperforms the experimental measure in this respect.
    Keywords: field experiment, socio-economic survey, risk attitude
    JEL: C93 D81 O1
    Date: 2011–01
  18. By: Catherine Rodríguez; Patricia Meirelles
    Abstract: This paper separately evaluates how devolution and accountability, two distinct aspects of the decentralization reforms implemented in Indonesia in the year 2001, influenced the public provision of water services. Using household level data it is found that the devolution of responsibility does not necessarily affect the provision of public services. Our findings show that the quality of publicly provided water decreased only in cities in which devolution was accompanied by a change in accountability. Robustness checks suggest that these results are driven by changes in the accountability framework rather than trends in the health services.
    Date: 2010–11–04
  19. By: Jean-Louis Arcand (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Marcel Fafchamps (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: Using a rich dataset from West Africa we study the determinants of membership in rural producer organizations (RPO). We ...nd that on average it is the more fortunate members of rural society who belong in RPOs. In Senegal, the dominant criteria are land ownership. In Burkina Faso it is economic status and family ties with village authorities. Ethnicity also plays a role: RPO membership is less likely for ethnic groups that traditionally emphasize livestock raising. We also look for evidence of assortative matching along multiple dimensions. To this e¤ect we develop an original methodology based on dyadic regressions. We ...nd robust evidence of assortative matching by physical and ethnic proximity as well as by wealth and social status.
    Keywords: keywords: matching;group membership;rural producer organizations;Africa
    Date: 2011–02–03
  20. By: Ambec, Stefan; Dinar, Ariel
    Abstract: By signing an international river sharing agreement (RSA), countries voluntary commit to release water in exchange for a compensation. We examine the robustness of such commitments to reduced water ows. We focus on RSAs that satisfy core lower bounds and fairness upper bounds. We characterize the constrained upstream incremental RSA as the core and fair RSA that is sustainable during the most severe droughts. It assigns to each country its marginal contribution to its followers, up to its maximal benet from water extraction. It lexicographically maximizes the welfare of the most upstream countries in the set of core and fair RSAs. Its mirror image, the downstream incremental RSA, is not sustainable to drought at the river source.
    Keywords: international river agreement, water, stability, core, fairness, global warming
    JEL: D74 Q23 Q28 Q54
    Date: 2010–08
  21. By: Carlo Carraro (University of Venice, Fondazione Eni Enrico Mattei); Emanuele Massetti (Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change)
    Abstract: We propose a realistic approach to climate policy based on the Copenhagen Agreement to reduce Greenhouse Gases (GHGs) emissions. We assess by how much the non-binding, although official, commitments to reduce emissions made in Copenhagen will affect the level of world GHGs emissions in 2020. Our estimates are based on official communications to the UNFCCC, on historic data and on the Business-as-Usual scenario of the WITCH model. We are not interested in estimating the gap between the expected level of emissions and what would be needed to achieve the 2°C target. Nor do we attempt to calculate the 2100 temperature level implied by the Copenhagen pledges. We believe these two exercises are subject to high uncertainty and would not improve the current state of negotiations. Rather, we take stock of the present politically achievable level of commitment and suggest an effective way to push forward the climate policy agenda. The focus is on what can be done rather than on what should be done. To this end, we estimate the potential of the financial provisions of the Copenhagen Agreement to sponsor mitigation effort in Non-Annex I countries. Using scenarios produced with the WITCH model, we show that lower commitment on domestic abatement measures can be compensated by devoting roughly 50% of the Copenhagen financial provisions in 2020 to mitigation in Non-Annex I countries. The policy implications of our results will be discussed.
    Keywords: Kyoto Protocol, International Climate Agreements, Climate Policy, Clean Development Mechanism
    JEL: F5 Q01 Q54 Q58
    Date: 2010–10

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.