adaptation to climate change a review through a development economics lens abstract this paper looks at adaptation to climate change from the point of view of poor households since the development literature has firmly established the role of weather risk as a source of income volatility for the poor and climate change is expected to increase this risk we review the range of risk coping mechanisms available to poorer households with a focus on possible barriers to adaptation we ask both how government interventions affect the set of options available for adaptation and risk coping and also what these adaptive responses imply for the prospects of sustainable development support for adaptation can involve efforts to make existing locations livelihoods and forms of production more resilient to climate risk in situ adaptation or reductions in vulnerability through the geographical and sectoral mobility of the poor transformational adaptation our review shows how successful adaptation will need to strike a balance between the two forms of adaptation avoiding locking in unsustainable practices in locations that are already marginal from an economic perspective and taking account of broader socio economic trends already taking place in many developing countries such as population growth and urbanisation we also highlight important considerations for policy makers which to date have been relatively neglected in the literature in particular related to the dynamic interaction between adaptation and sustainable development

earthquake fatalities the interaction of nature and political economy to say that the level of fatalities resulting from an earthquake is inversely related to a country s per capita level of income is hardly novel what makes our approach novel is that we relate fatalities to both per capita income and the level of inequality that exists within a country through their joint impact on the likelihood of collective action being taken to mitigate the destructive potential of quakes we first develop a theoretical model which offers an explanation as to why in some environments different segments of society prove incapable of arriving at what all parties perceive to be an agreeable distribution of the burden of the necessary collective action causing the relatively wealthy simply to self insure against the disaster while leaving the relatively poor to its mercy following this we test our theoretical model by evaluating 269 large earthquakes occurring worldwide between 1960 and 2002 taking into account other factors that influence a quake s destructiveness such as its magnitude depth and proximity to population centers using a negative binomial estimation strategy with both random and fixed estimators we find strong evidence of the theoretical model s predictions that is while earthquakes themselves are natural phenomena beyond the reach of humankind our collective inaction with respect to items like the creation and enforcement of building codes failure to retrofit structures and to enact quake sensitive zoning clearly plays a part in determining the actual toll that a given quake takes and it is through these and other examples of collective inaction that limited per capita income and inequality couple together with a given quake s natural destructive power in determining the actual fatalities resulting from a quake

micro equity for sustainable development selection monitoring and exit strategies of micro angels abstract sustainable development requires balancing environmental social and financial concerns this requires investors to select and monitor entrepreneurs who would balance these triple concerns at the same time there has been considerable attention to small is beautiful and micro investors have stepped in to look for such eco entrepreneurs to the classical institutional logic of economic returns they add the logic of social returns as well as the logic of environmental and local safeguards this study looks at investment clubs in france which have been coping with this balance of people planet and profitability for the last three decades we study their preferences in the selection process for investment projects in the entrepreneurs monitoring process as well as their exit strategies using principal components analysis we find that a large number of selection criteria can be regrouped into underlying factors that take into account two out of the three major dimensions of sustainable development at a time we find that four factors lie beneath the criteria used by the micro angels in the monitoring process we have also been able to establish a one to one correspondence between four of the six major exit strategies and four selection factors suggesting a prior relationship between selection process criteria and preferred exit strategies

strategic corporate social responsibility in controversial industry sectors the social value of harm minimisation this paper examines how it is possible for firms in controversial sectors which are often marked by social taboos and moral debates to act in socially responsible ways and whether a firm can be socially responsible if it produces products harmful to society or individuals it contends that a utilitarian justification can be used to support the legal and regulated provision of goods and services in these areas and the regulated and legal provision of these areas produces less harm than the real alternative illegal and unregulated supply utilitarianism is concerned as much with harm minimisation as good maximisation and both are equally important when it comes to maximising welfare bentham 1789 1970 mill 1863 1964 any adequate theory of csr must therefore have the capacity to handle a business that minimises harm as well as those that more straightforwardly maximise good in this paper we therefore attempt two tasks first we argue that the legal but regulated provision of products and services may be better from an overall utilitarian perspective than a situation in which these harmful or immoral goods and services are illegal but procurable via a black market porter and kramer s 2006 strategic csr framework is then presented to describe how firms in these controversial sectors can act in socially responsible ways this model highlights the importance of firm strategy in selecting areas of socially responsible behaviours that can be acted upon by firms in each industry

a hybrid algorithm for simultaneous scheduling of production and distribution in multi echelon structures this paper presents a dynamic programming algorithm for simultaneous determination of production batch sizes in an assembly network and distribution batch sizes in a conjoined distribution arborescent network the objective is to minimize average cost per period over an infinite horizon costs consist of processing costs at each node and linear holding costs for inventory final product demand rates may vary among the retail nodes but at each retail node the demand rate is assumed to be known constant and continuous all demand must be met backorders are not permitted the model can be used for a single product or for several products that are temporarily combined for distribution or for scheduling production in a system where several end products are produced from the same intermediate product as in some biochemical manufacturing processes

income distribution political instability and investment abstract this paper successfully tests on a sample of 71 countries for the period 1960 85 the following hypotheses income inequality by fuelling social discontent increases sociopolitical instability the latter by creating uncertainty in the politico economic environment reduces investment as a consequence income inequality and investment are inversely related since investment is a primary engine of growth this paper identifies a channel for an inverse relationship between income inequality and growth we measure socio political instability with indices which capture the occurrence of more or less violent phenomena of political unrest and we test our hypotheses by estimating a two equation model in which the endogenous variables are investment and an index of socio political instability our results are robust to sensitivity analysis on the specification of the model and the measure of political instability and are unchanged when the model is estimated using robust regression techniques

decomposing the macroeconomic effects of natural disasters a national income accounting perspective abstract there is an unresolved debate as to whether natural disasters present true obstacles to a country s economic growth and development given that the empirical evidence is rather heterogeneous in this paper we explore whether aggregate analyses are likely to mask different responses of the components export and import government consumption investment and private consumption of gross domestic product gdp to this end we assembled a panel data set of hurricane strikes and national income accounting data for 21 caribbean countries for the period 1970 2011 we used a panel vector autoregressive varx model to take account of the direct impact of the storm shocks and any feedback mechanisms our results suggest that the responses on each gdp component differ widely where we find some effects on export import public consumption investment and private consumption however the differences in timing and directions of these impacts demonstrate why it may be difficult to find any clear and large net aggregate impact of hurricanes and natural disasters in general on gdp

a critique of milton friedman s essay the social responsibility of business is to increase its profits the main arguments of milton friedman s famous and influential essay are unsuccessful he fails to prove that the exercise of social responsibility in business is by nature an unfair and socialist practice

bribing votes a new explanation to the inequality redistribution puzzle in ldc s the recent empirical literature on redistribution and developmentemphasizes two main evidences i more redistribution generallyinduces higher growth rates and ii more inequality does notnecessarily increase the political demand for redistribution these stylized facts are at odds with the correlations observedin developed countries several theoretical arguments can beadvanced to explain these puzzles in this paper it is shownthat vote purchases may be seen as an additional argument toexplain puzzle ii we formalize this idea and examine theconditions under which vote bribes may be an obstacle toredistribution and thus to growth in a developing economy

a reply to thomas mulligan s critique of milton friedman s essay the social responsibility of business to increase its profits professor thomas mulligan undertakes to discredit milton friedman s thesis that the social responsibility of business is to increase its profits he attempts to do this by moving from friedman s paradigm characterizing a socially responsible executive as willful and disloyal to a different paradigm i e one emphasizing the consultative and consensus building role of a socially responsible executive mulligan s critique misses the point first because even consensus building executives act contrary to the will of minority shareholders but even more importantly because he assumes that the mandate of a shareholder majority brings legitimacy to efforts of corporate managers to utilize corporate wealth in solving social problems it is the role of our democratic institutions to deal with national agenda issues such as inflation unemployment and pollution not that of the private sector corporations and private individuals do have a role to play in enhancing the quality of the human environment however and the author suggests a coherent means of developing that role in an effort rescue corporate social responsibility from mulligan no less than from friedman

does rising income increase or decrease damage risk from natural disasters abstract recent empirical literature has found a negative relationship between income per capita and measures of risk from natural disaster supportive of logic that higher incomes allow countries to mitigate disaster risk we argue that behavioral changes at the micro level in response to increasing income such as location choice and extent of costly abatement activity may lead to a non linear relationship between aggregate incomes and disaster damages where the risks increase with income before they decrease in a country year panel data set we show that disaster risk associated with flooding landslides and windstorms increases with income up to gdp per capita levels of 5044 3360 and 4688 per year respectively and decrease thereafter such non linear impacts are absent for other disaster types such as extreme temperature events and earthquakes where the links between human behavioral choices and exposure to risk are not as strong from a policy perspective this suggests that for the least developed countries the dual goals of disaster risk prevention and economic development cannot be assumed to be complementary for all forms of natural disaster in addition to allocating resources to manage disaster risk the poorest nations may have to be more proactive in enacting policies that alter the behavioral choices of citizens that impact a country s exposure to natural disaster risk

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

new ways of looking at old issues inequality and growth abstract the paper uses new cross country data on income and asset land distribution to show that i there is a strong negative relationship between initial inequality in the asset distribution and long term growth ii inequality reduces income growth for the poor but not for the rich and iii available longitudinal data provide little support for the kuznets hypothesis policies that increase aggregate investment and facilitate acquisition of assets by the poor might thus be doubly beneficial for growth and poverty reduction

why are stabilizations delayed when a stabilization has significant distributional implications e g tax increases to eliminate a large budget deficit socioeconomic groups may attempt to shift the burden of stabilization onto other groups the process leading to stabilization becomes a war of attrition each group attempting to wait the others out and stabilization occurring only when one group concedes and bears a disproportionate share of the burden the authors solve for the expected time of stabilization in a model of rational delay and relate it to several political and economic variables they motivate this approach and its results by comparison to historical and current episodes copyright 1991 by american economic association

98 effective integer ratio lot sizing for one warehouse multi retailer systems a warehouse supplies n retailers constant external demand occurs at each retailer and shortages are not allowed there are linear holding costs and fixed costs for ordering at the warehouse and at each retailer the goal is to minimize the long run average cost over an infinite time horizon we define a new class of policies for this problem whose simple structure facilitates both computation and implementation the cost of a policy that is optimal within this class is shown to be within 2 of the cost of an optimal policy for the original problem in the worst case such a policy can be computed in on log n time

coordinated supply chain management abstract historically the three fundamental stages of the supply chain procurement production and distribution have been managed independently buffered by large inventories increasing competitive pressures and market globalization are forcing firms to develop supply chains that can quickly respond to customer needs to remain competitive these firms must reduce operating costs while continuously improving customer service with recent advances in communications and information technology as well as a rapidly growing array of logistics options firms have an opportunity to reduce operating costs by coordinating the planning of these stages in this paper we review the literature addressing coordinated planning between two or more stages of the supply chain placing particular emphasis on models that would lend themselves to a total supply chain model finally we suggest directions for future research

fiscal decentralization and natural hazard risks at least to some extent due to pressure from international donors many countries have become more fiscally decentralized the underlying premise being that greater decentralization might improve the provision of local public goods and services we test this proposition by determining whether relatively more decentralized countries fare better when natural disasters strike in terms of its effects on the population overall we find evidence supporting our maintained hypothesis though the effect appears much more robust in developing countries

what causes violent crime this study uses panel data of intentional homicide and robbery rates for a sample of developed and developing countries for the period 1970 1994 based on information from the united nations world crime surveys to analyze the determinants of national crime rates both across countries and over time a simple model of the incentives to commit crimes is proposed which explicitly considers possible causes of the persistence of crime over time criminal inertia a panel data based gmm methodology is used to estimate a dynamic model of national crime rates this estimator controls for unobserved country speci ce ects the joint endogeneity of some of the explanatory variables and the existence of some types of measurement errors a icting the crime data the results showthat increases in income inequality raise crime rates crime tends to be countercyclical and criminal inertia is signi cant 2002 elsevier science b v all rights reserved

the macroeconomic impacts of natural disasters the case of floods we use panel vector autoregression models to trace the dynamic response of output growth to flood shocks using new data on large flood events in 135 countries between 1985 and 2008 flood shocks tend to have a positive and significant average impact on per capita gdp growth however this effect is limited to developing countries and to moderate floods the positive impact of floods is larger and more significant in the agricultural sector while floods seem to have a direct effect on agricultural growth rates in developing countries their effect on nonagricultural growth rates is mainly indirect jel o11 q54

economic development and losses due to natural disasters the role of hazard exposure abstract our contribution is to show that the relationship between wealth and disasters is mainly formed by the exposure to disaster hazard we first build a simple analytical model that demonstrates how countries that face a low hazard of disasters are likely to see first increasing losses and then decreasing ones with increasing economic development at the same time countries that face a high hazard of disasters are likely to experience first decreasing losses and then increasing ones with increasing economic development we then use a cross country panel dataset in conjunction with a hazard exposure index to investigate whether the data is consistent with the predictions from the model in line with our model we find that the relationship of losses with wealth crucially depends on the level of hazard of natural disasters faced by countries

note comments on the optimality in optimal and system myopic policies for multi echelon production inventory assembly systems schwarz and schrage s model assumes that for optimal policies in a multi echelon production inventory system the lot size of a stage must not be larger than that of a predecessor stage as lots move from the initial stage to the final stage examples in this note illustrate that set up costs and inventory holding costs may be such that optimal inventory policies exist when smaller lot sizes are produced intermittently at a stage with an overlap to feed the continuous production of a larger lot size at the next stage also an example shows that in contrast with another assumption in their model optimality does not always require that the lot size at each stage be an integer multiple of the lot size at the successor stage

a two echelon inventory distribution system with power demand pattern and backorders abstract this paper addresses the implications of considering power demand pattern and backorders in the one warehouse n retailer problem specifically we assume that items at the retailers are withdrawn from the inventory following a power pattern the objective function consists of the sum of ordering holding and backordering costs at all installations this objective function depends on the class of inventory policies that we choose for the formulation of the problem in general obtaining the cost function is an arduous task since the average inventory at the warehouse could be difficult to determine however if we apply single cycle policies the computation of the total average cost becomes possible under these assumptions we show that the one warehouse n retailer system with power demand pattern and backorders can be formulated as a mixed non linear programming problem

are ethical or socially responsible investments socially responsible in this article we discuss whether it pays to invest ethically our aim is to examine corporate social responsibility from philosophical moral and practical points of views we focus on two main issues related to ethical investments firstly we discuss the moral dilemma of how capitalism has changed its shape in today s world and from blaming the business there is a general attempt to use the markets to promote ethics values and corporate social responsibility secondly we analyze the growth of ethical investment funds in the uk today and their performance and highlight some of the institutional investors involved in the management of ethical funds we discuss whether ethical investments really succeed in reducing the conflict between profit making and social responsibility as they promise or whether they use commercial rhetoric and market mechanism to merely sell us our own perceived values back we conclude that the paper has a key contribution in setting the scene for future research in an area that is evolving and of fundamental importance to companies investors and various stakeholder groups

saving for retirement without harming others this article discusses moral issues raised by defined contribution retirement plans specifically 401 k plans in the united states the primary aim is to defend the claim that the federal government ought to require 401 k plans to include a range of socially responsible investment sri options the analysis begins with the minimal assumption that corporations engage in behavior that imposes morally impermissible harms on others with sufficient regularity to warrant attention after motivating this assumption i argue that individual investors typically share in the responsibility for the harms imposed by corporations in which they invest and that they therefore have a moral obligation to incorporate considerations of social responsibility into their investment decisions when possible to avoid being complicit in morally impermissible corporate behavior i further argue that individuals are subject to substantial institutional and structural pressures that create a powerful incentive to invest in 401 k plans even though such plans typically lack any sri options to eliminate this pressure to commit indirect harm in the process of saving for retirement i recommend that the federal government requires 401 k plans to incorporate a range of sri options and i defend this proposal from several possible objections

factor shares and savings in endogenous growth in models of steady investment driven growth an individual s propensity to save depends on how much of his income is drawn from accumulated factors of production capital rather than from nonaccumulated factors when agents are heterogeneous in this respect growth oriented policies have distributional consequences and in the absence of lump sum redistribution their implementation faces political constraints if the median voter is capital poor relative to the economy s representative agent political interactions tend to slow down growth when policy acts on capital s income share and tend to accelerate it when investment subsidies are the policy instrument of choice copyright 1993 by american economic association

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on