intergenerational equity and sustainability abstract this paper explores the limitations of conventional economic analysis of intergenerational problems and examines some of the alternatives suggested in the literature it is argued that proper consideration of future generations has at least three requirements first when future costs and benefits are considered it should be taken into account that they are to be enjoyed by different generations second the sustainability requirement should be adopted this represents an equity commitment to the future and implies the recognition that future generations have the right to nondeteriorated ecological and economic capacity the paper studies the ways in which the recognition of these rights might be incorporated into economic evaluation and management third an appropriate institutional network to enforce the recognition of these rights in decision making processes should be constituted its design and necessary functions are also analyzed

ecological economic viability as a criterion of strong sustainability under uncertainty strong sustainability according to the common definition requires that different natural and economic capital stocks be maintained as physical quantities separately yet in a world of uncertainty this cannot be guaranteed to therefore define strong sustainability under uncertainty in an operational manner we propose to use the concept of viability viability means that the different components and functions of a dynamic stochastic system at any time remain in a domain where the future existence of these components and functions is guaranteed with sufficiently high probability we develop a unifying and general ecological economic concept of viability that encompasses the traditional ecological and economic notions of viability as special cases it provides an operational criterion of strong sustainability under a mild form of uncertainty and for medium spatial and temporal scales we illustrate this concept and demonstrate its usefulness by applying it to livestock grazing management in semi arid rangelands publication ecological economic viability as a criterion of strong sustainability under uncertainty available from https www researchgate net publication 46490456 ecological economic viability as a criterion of strong sustainability under uncertainty accessed apr 3 2017

one market one number a composite indicator assessment of eu internal market dynamics we consider the lack of consensus about an appropriate theoretical framework linking sub indicators as a defining characteristic of composite indicators this intrinsic feature implies uncertainties about the appropriate normalization and aggregation of the raw data the two are related index theory offers some valuable guidelines about their connection yet these do not fully solve the basic problem of expert disagreement we embed such residual disagreement in the aggregation method itself specifically we apply an impartial benefit of the doubt weighting procedure where weight restrictions incorporate the available information on experts opinions we apply this procedure to the dynamic performance assessment of eu internal market effects thereby highlighting its capacity to disaggregate member states observed performance shifts into changes relative to benchmarks and performance changes of the benchmarks i e catching up versus genuine progress our results indicate that the latter factor is more important in explaining the observed progress

getting the safe minimum standard to work in the real world a case study in moral pragmatism abstract there is growing endorsement of local stake holder conventions to resolve unusual environmental disputes the conventions are separate decision making bodies designed to by pass conventional institutions the hazards of a stake holder convention which is overly detached from conventional decision making leads to a discourse that never successfully confronts the value controversies which the stake holder convention is charged to resolve a case study uncovers obvious and robust strategic manipulations of stake holder conventions that intrude on value dialogue an appeal to the safe minimum standard rules of ciriacy wantrup updated to engage this question successfully corrects some of the more egregious stumbling blocks to good faith dialogue in local discourse the proposed constraints on the stake holder convention can be quite directive authoritative and bureaucratic yet the constraints are necessary to preserve good faith conduct within the dialogue

sugar and structural change in the cuban economy abstract diversification of the economy away from sugar was high among the economic priorities of the cuban revolutionary government in power since 1959 this essay explores whether sugar s role in the structure of the economy has in fact changed significantly in the last 25 years or so by examining three aspects of structural change specialization in production export concentration and effects of changes in world sugar market prices on economic growth the analysis suggests that policies of the revolutionary government have had a marginal impact in reducing sugar s role plans to increase sugar production and exports through the end of the century virtually assure that sugar will continue to play a predominant role in the economy

on welfare frameworks and catastrophic climate risks recent theoretical work in the economics of climate change has suggested that climate policy is highly sensitive to fat tailed risks of catastrophic outcomes weitzman 2009 68 such risks are suggested to be an inevitable consequence of scientific uncertainty about the effects of increased greenhouse gas concentrations on climate criticisms of this controversial result fall into three categories the first suggests that it may be irrelevant to cost benefit analysis of climate policy the second challenges the fat tails assumption and the third questions the behavior of the utility function assumed in the result this paper analyses these critiques and suggests that those in the first two categories have formal validity but that they apply only to the restricted setup of the original result which may be extended to address their concerns they are thus ultimately unconvincing critiques in the third category are shown to be robust however they open up new ethical and empirical challenges for climate economics that have thus far been neglected how should we value catastrophes as a society i demonstrate that applying results from social choice to this problem can lead to counterintuitive results in which society values catastrophes as infinitely bad even though each individual s utility function is bounded finally i suggest that the welfare functions traditionally used in climate economics are ill equipped to deal with climate catastrophes in which population size changes drawing on recent work in population ethics i propose an alternative welfare framework with normatively desirable properties which has the effect of dampening the contribution of catastrophes to welfare

waiting for change adjustment and reform in cuba abstract buffeted by the collapse of trading relations with the former socialist bloc and the continuing us embargo cuba has attempted to adjust to external crisis via tighter rationing to curtail demand and traditional planning and sectoral strategies to expand the supply of tradables this overall program has failed and cuba has recently begun timid steps toward a more market oriented approach we argue that the centerpiece of a new strategy should be a rapid privatization which can be designed to absorb the monetary overhang widely distribute assets and control and protect the social safety net that has characterized the cuban economy

precautionary principle and robustness for a stock pollutant with multiplicative risk the interest shown by policy makers and economists in the precautionary principle indicates the importance of model uncertainty in global warming policy i show that through robust control policy makers can implement the precautionary principle to regulate a stock pollutant and i analyze its effect on expected steady state pollution taxes stocks and welfare the paper is broadly comprised of a theoretical part and an application to global warming policy i find that 1 an increase in either uncertainty about the model or risk about abatement cost increases expected steady state pollution taxes 2 a robust policy is preferred for any level of model uncertainty and this preference increases for either higher model uncertainty or higher multiplicative risk and 3 the effect on expected steady state pollution taxes and stock of introducing model uncertainty is relatively small for high levels of model uncertainty these results advocate using robust policies for a stock pollutant in the presence of model uncertainty

some economics of global warming the greenhouse effect itself is simple enough to understand and is not in any real dispute what is in dispute is its magnitude over the coming century its translation into changes in climates around the globe and the impacts of those climate changes on human welfare and the natural environment these are beyond the professional understanding of any single person the sciences involved are too numerous and diverse demography economics biology and the technology sciences are needed to project emissions atmospheric chemistry oceanography biology and meteorology are needed to translate emissions into climates biology agronomy health sciences economics sociology and glaciology are needed to identify and assess impacts on human societies and natural ecosystems and those are not all there are expert judgments on large pieces of the subject but no single person clothed in this panoply of disciplines has shown up or is likely to this article makes an attempt to forecast the economic and social consequences of global warming due to anthropogenic greenhouse gases and attempting to prevent it

how to decide when experts disagree uncertainty based choice rules in environmental policy environmental economists have traditionally addressed the issue of choice under uncertainty by applying the expected utility hypothesis when policymakers face a panel of experts with widely divergent beliefs the problem may more accurately be described as a case of choice under pure uncertainty arrow and hurwicz 1972 demonstrate that rational choice criteria under pure uncertainty will focus on the extremes of the state space not the midpoint as is typically assumed using nordhaus s dice model uncertainty based choices about global warming policies are evaluated linkages to the safe minimum standard and the precautionary principle are also discussed

the political economy of global carbon emissions reductions abstract the discussion about what reductions in greenhouse gas emissions are required and how the emissions rights might be distributed globally has fostered the belief that there is a fundamental conflict between the rich nations of the north and the poor but populous nations of the south the argument is that grandfathering the rights will only reinforce existing global inequalities while per capita distribution of the rights would lead to such huge transfers of wealth to the south as to be unacceptable to the north however a very simple general equilibrium model highlighting key elements of the global economy shows that this perception is incorrect under a plausible interpretation of the goal of the united nations framework convention on climate change to avoid dangerous anthropogenic interference with the climate system instead of using an economic damage function to determine the optimal level of emissions reductions the model s utility functions are calibrated to reflect scientific understanding of what would be required to stabilize the atmosphere at safe concentrations of greenhouse gases among policy options that would accomplish this the united states has a preference for grandfathering the allocation of emissions rights over a per capita allocation but this preference is not strong and could be offset by other geopolitical considerations

global warming discounting is not the issue but substitutability is the cost benefit study of nordhaus 1994 is representative for the neoclassical approach towards global warming nordhaus found that no substantial emission cuts are warranted most of his critics have concentrated on the issue of discounting and demanded that a lower discount rate should be applied these criticisms first miss the point and second lead to ethically dubious inconsistent conclusions and inefficient policy choices they miss the point because the real problem of nordhaus s methodology is his implicit underlying assumption of perfect substitutability between natural and other forms of capital given the validity of this assumption lowering the rate of discount is inconsistent with current savings behaviour is ethically dubious because future generations will be much richer than the current one anyway and is inefficient because scarce financial resources are channelled into emissions abatement that exhibits rates of return far inferior to alternative public investments any call for aggressive emission abatement must therefore directly attack the perfect substitutability assumption of neoclassical economics the real disagreement is about whether consumption growth can compensate for environmental degradation caused by global warming discounting is not the issue but substitutability is

trade debt and the cuban economy abstract like many other latin american countries cuba pursued a strategy of debt led growth in the mid 1970s and sustained large balance of payments deficits with the west though external balance was restored by 1979 cuba faced a severe liquidity crisis in 1982 when short term loans were suddenly withdrawn this paper is a study of cuba s seemingly exceptional ability to decrease its foreign debt after 1980 meet interest payments on time and maintain an overall program of growth with equity a combination of implicit soviet trade subsidies and cuba s socialist polity and political economic control have apparently mitigated the constraints of the world capitalist system and fostered an alternative program to the current austerity measures of most of latin america

theories of choice under ignorance and uncertainty abstract in this paper knight s distinction between risk and uncertainty and its significance for economic analysis are examined the paper consists of a survey of some recent developments on the theory of choice under uncertainty and some applications of these theories to problems for which bayesian decision theory has not proved entirely satisfactory two problems are examined in detail the first is that of finance and insurance and the second is that of risktaking behaviour with special emphasis on lotteries

monetary valuation of the social cost of co2 emissions a critical survey an expanding branch of research has estimated the potential costs of climate change which are often expressed as the social cost of carbon scc or the costs of an additional ton of co2 emissions estimates of the scc can be used by policy makers to evaluate climate change policies and greenhouse gas emission reduction projects by means of cost benefit analyses cbas such analyses are complicated by the wide range of scc values that have been reported in the literature and the large uncertainties involved in estimating the potential economic impacts and related costs of climate change this study presents a critical review of the reported scc estimates by examining some neglected consequences of climate change uncertain and extreme scenarios of climate change the discounting of future climate change effects the treatment of individual risk aversion and assumptions about social welfare in view of the many uncertainties and omissions in conventional cost benefit analyses of climate impacts and the scc alternative approaches to decision making should be considered for climate policy

setting environmental policy when experts disagree how can a decision maker assess the potential of environmental policies when a group of experts provides divergent estimates on their effectiveness to address this question we propose and analyze a variant of the well studied alpha maxmin model in decision theory in our framework and consistent to the paper s empirical focus on renewable energy r d investment experts subjective probability distributions are allowed to be action dependent in addition the decision maker constrains the sets of priors to be considered via a parsimonious measure of their distance to a benchmark average distribution that grants equal weight to all experts while our model is formally rooted in the decision theoretic framework of olszewski rev econ stud 74 567 595 2007 it may also be viewed as a structured form of sensitivity analysis we apply our framework to original data from a recent expert elicitation survey on solar energy the analysis suggests that more aggressive investment in solar energy r d is likely to yield significant dividends even or rather especially after taking expert ambiguity into account

cmea effective but cumbersome political economy the council for mutual economic assistance is primarily a forum for bilateral bargaining between the soviet union and each of the other cmea countries the bilateral negotiations are conducted with tremendous concern for soviet long term preferences and for the short term economic political stability of east european countries the cmea provides the soviet union with an effective but cumbersome politico economic policy making apparatus that is becoming less effective and increasingly cumbersome over time from the east european perspective the cmea tends to solidify the positions of the east european leaders yet generate long term economic costs what are the preferences upon which the cmea is constructed how are cmea characteristics related to these preferences what are the economic costs and benefits to member countries in static and dynamic terms why have costs for all member countries risen over time how is intra cmea trade likely to change during the next decade

incorporating distributional considerations in the safe minimum standard approach endangered species and local impacts abstract explicitly incorporating current distributional concerns into the safe minimum standard sms approach is the objective of this study the sms approach is a collective choice process that prescribes protecting a minimum level of a renewable natural resource unless the social costs of doing so are somehow excessive or intolerably high more complete implementation of an sms approach if it is to be a pragmatic policy tool requires that distributional considerations be included in determining whether the economic consequences of preservation actions are intolerable two case studies involving the us endangered species act are used to illustrate how distributional concerns might be incorporated into the sms approach

foreign aid and domestic savings in less developed countries some tests for causality abstract the negative correlation between foreign aid and domestic savings rates in less developed countries is an accepted fact in the existing literature the direction of causality however remains a subject of dispute in this paper we use time series data to investigate causal relationships we conclude that causal relationships are not universal and it is suggested that in those countries where they do hold the direction of causality may depend upon the proportions of aid from bilateral and multilateral sources

rawlsian intergenerational justice as a markov perfect equilibrium in a resource technology the rawlsian maximin criterion is combined with nonpaternalistic altruistic preferences in a nonrenewable resource technology the maximin programme is shown to be time inconsistent for a subset of initial conditions a solution to this intergenerational conflict is found under a given assumption as a generically unique subgame perfect equilibrium

animal welfare and social decisions is it time to take bentham seriously abstract this paper analyzes and questions the standard welfare economics assumption of anthropocentric welfarism i e that only human well being counts intrinsically alternatives where also animal welfare matters intrinsically are analyzed both theoretically and empirically the general public s ethical preferences are measured through a survey of a representative sample in sweden and the responses from a clear majority suggest that animal welfare should indeed carry intrinsic weight in public decision making current legislation in many countries is consistent with this a brief review of moral philosophy on animal welfare indicates that a large majority of philosophers believe that animal welfare should count intrinsically it is moreover demonstrated that it is theoretically and practically possible to generalize welfare economics in order to give intrinsic value also to animal welfare the paper concludes that there are strong reasons to sometimes generalize welfare economics in order to take animal welfare into account directly i e in addition to effects through individual utilities the practical implications of doing so are likely to be more important over time as the scientific methods of measuring animal welfare are gradually improving

allocating resources in an uncertain world water management and endangered species instream flows may be essential in protecting aquatic species that are threatened or endangered an economic model of the optimal allocation of water under pure uncertainty is developed with particular attention paid to the situation when a species characterized by critical depensation is affected by instream flows we adopt the notion of pure uncertainty that frank knight and daniel ellsberg intended which applies when decision makers cannot reduce their uncertainty to a unique probability distribution following recent work by hansen sargent and others we employ robust control as a way to deal with this problem copyright 2008 oxford university press

climate policies under climate model uncertainty max min and min max regret temperature responses and optimal climate policies depend crucially on the choice of a particular climate model to illustrate the temperature responses to given emission reduction paths implied by the climate modules of the well known integrated assessments models dice fund and page are described and compared a dummy temperature module based on the climate denialists view is added using a simple welfare maximising growth model of the global economy the sensitivity of the optimal carbon price renewable energy subsidy and energy transition to each of these climate models is discussed the paper then derives max min max max and min max regret policies to deal with this particular form of climate model uncertainty and with climate scepticism the max min or min max regret climate policies rely on a non sceptic view of global warming and lead to a substantial and moderate amount of caution respectively the max max leads to no climate policies in line with the view of climate sceptics

intertemporal preferences and intergenerational equity considerations in optimal resource harvesting abstract optimal resource harvesting decisions are reexamined in light of a distinction between personal discount rates reflecting individuals rate of time preference and generational discount rates reflecting considerations of equity for future generations the discount rates have partially counteracting effects upon the optimal harvesting decisions and upon the optimal distribution of benefits in any one period for instance it is the generational discount rate that determines the potential for economically optimal extinction of a renewable resource by distinguishing the two discount rates it is possible to give each generation equal consideration while still allowing for individual impatience

species preservation versus development an experimental investigation under uncertainty the safe minimum standard sms is a decision rule to preserve renewable resources unless the social costs of doing so are intolerable while unpersuasive to many support for the sms has been advocated by some economists for settings involving irreversibility and a high degree of uncertainty the objective of this paper is to explore decision making involving species preservation versus development within an experimental laboratory setting and involving uncertainty the experimental design implements a number of prior game theoretic investigations of the sms bishop 1978 ready and bishop 1991 palmini 1999 involving insurance and lottery or combined games against nature the choices are between species preservation which possibly provides a cure for a disease or developing habitat leading to irreversible depletion econometric results from a random parameters logit model using responses from 117 participants across both u s and mexican university student samples and 9 treatment choices indicate that support for the sms varies across the type of game the imposed maximum regret condition concerning the relative magnitude of the costs of disease and net benefits of development a constructed measure of respondents risk aversion and other factors there is also strong evidence of unobservable heterogeneous preferences for preservation within our sample

sustainability under uncertainty a deontological approach a deontological or kantian approach to intergenerational fairness suggests that sustainability criteria should be imposed as prior constraints on the maximization of social preferences concerning the distribution of welfare between present and future generations in particular it is plausible to assert that each successive generation holds a duty to ensure that the expected welfare of its offspring is no less than its own perceived well being this moral rule implies a bias against actions that generate present benefits but impose the risk of irreversible future losses if the preservation of options would allow for improved decisions as new information became available

unjust intergenerational allocations abstract an intergenerational allocation is defined to be unjust if there is a feasible allocation with more total consumption and less relative inequality unjust allocations are characterized in technologies satisfying certain regularity conditions after ruling out unjust allocations the consequences of letting generations choose according to a standard form of altruistic preferences are explored in to particular classes of technologies a connection between excluding unjust allocations and maximizing the welfare of the worst off generation is established in these technologies

trust law sustainability and responsible action abstract the problem of managing for sustainability is marked by the need to make decisions on behalf of others and by the uncertainties that attend such decisions however the economic literature on sustainability has paid scant attention to how decisions on behalf of others might differ from decisions on behalf of oneself and when risk has been modeled explicitly the expected utility hypothesis has generally been used a generation acts sustainably if the expected value of the next generation s utility is not less than the present s this paper investigates how we think about responsibly acting on another s behalf by looking to the united states law of trusts because in important respects the current generation views its responsibility to the future as a trust relationship trust law illuminates responsible decision making under both risk and uncertainty even under conditions of risk more conservative action than would be suggested by the expected utility hypothesis is warranted because it emphasizes preservation of trust principal and disavows profit maximization trust doctrine indicates that special caution should be exercised in conditions of uncertainty finally resource economic concepts of strong sustainability the precautionary principle and the safe minimum standard of conservation are interpreted according to trust principles

communicating trade offs amid controversial science decision support for climate policy abstract the paper considers the decision that arises in climate policy where there is expert disagreement about the correct scientific model and where a group of stakeholders needs to agree on a common policy target policy choice is posed as a decision under knightian uncertainty where decision makers lack grounds for assigning a particular probability distribution across contending forecasting models the decision is then framed as one of balancing two competing objectives that plausibly align with the dominant concern of stakeholders from each side in the policy debate a decision criterion is proposed to identify options for compromise that balance these objectives in different ways the criterion spans three standard non bayesian decision criteria policies generated by the criterion are combined with visual tools to communicate what s at stake in an environmental policy decision in which stakeholders disagree both about scientific models and about the relative importance of risks to the environment versus risks to economic growth the approach summarizes information that could be useful to policy makers tasked with negotiating a compromise the framework is applied to climate policy using dice 2007 nordhaus 2008 the results highlight a basic asymmetry between the mistake of doing too little and that of doing too much that suggests a strong argument for avoiding the current status quo of global inaction

justifying precautionary policies incommensurability and uncertainty abstract when decisions are taken in conditions of keynesian or knightian uncertainty and when there is a threat of serious or irreversible environmental damage the precautionary principle is often recommended to guide decision making however the precautionary principle has been widely criticised in response to these criticisms a qualitative version of the precautionary principle is developed which draws its normative content from a blend of formal decision theory and political philosophy it is argued that precautionary action can be justified by some flexible combination of uncertainty and incommensurability the greater the uncertainty the less incommensurability is required to justify precautionary action and vice versa throughout the paper the arguments are explored using the example of climate change decision problems

a quantitative minimax regret approach to climate change does discounting still matter abstract using cost benefit analysis to determine an optimal climate mitigation target is criticised especially because i it fails to sufficiently take into account low probability high impact events and ii results strongly depend on the discount rate used one of the alternative suggestions to inform policymakers about the right mitigation target that does take the risks associated with low probability high impact events explicitly into account is the minimax regret criterion we apply the minimax regret criterion quantitatively using an integrated assessment model with extreme values for climate sensitivity damage estimates and mitigation costs the goal is to analyse whether such a method leads to different results compared to standard cost benefit analysis and whether the results are still sensitive to the discount rate used we find that the minimax regret approach leads to more stringent and robust climate targets for relatively low discount rates and if both a high climate sensitivity and high damage estimates are assumed if one of these assumptions does not hold the difference between the minimax regret approach and standard cost benefit analysis is much smaller therefore we conclude that the discount rate used can still be of vital importance even when applying a minimax regret approach

specifications of social welfare in economic studies of climate policy overview of criteria and related policy insights an important assumption in economic studies of climate policy is the social welfare function this paper shows that applying distinct decision or social welfare criteria can result in different optimal policies of climate control notably if climate change impacts are uncertain first decision criteria in current climate economic studies are reviewed next the most important alternatives are discussed including their mathematical formalization and incorporation in economy climate models most of these alternative criteria suggest more stringent climate policies to be optimal than the standard discounted utilitarianism approach however several important welfare criteria have not or hardly seen any application in the economic analysis of climate policy we conclude that there is clear need for systematic research on this theme for which the current review provides a solid basis

efficiency and applicability of economic concepts dealing with environmental risk and ignorance abstract the paper examines the efficiency and applicability of various economic concepts dealing with environmental uncertainty their applicability is analysed by classifying environmental uncertainty according to different criteria using such a structure it can be shown that while the economic concepts are able to deal satisfactorily with some types of environmental uncertainty they are unable to deal with others adequately the analysis of efficiency distinguishes between environmental risk in which the decision maker is aware of the distribution function of the random variables and ignorance in which the decision maker does not know the relevant distribution functions the concept of a risk premium proposed by siebert the policy recommendation to promote integrated technologies and the environmental assurance bonding system developed by costanza and perrings are examined in terms of efficiency and applicability the analysis reveals the following i the application possibilities of the three concepts differ significantly ii a concept which concentrates on the reduction of risk may lead to an increase in ignorance iii while an economic concept may be efficient in the context of risk it can be inefficient when ignorance exists iv a trade off exists between the possibility to precisely state whether an economic concept is efficient and the scope of its applicability

accounting for the risk of extreme outcomes in an integrated assessment of climate change abstract the potential for climate catastrophes represented by fat tailed distributions on consequences has attracted much attention recently to date however most integrated assessment models have either been largely deterministic or deterministic with ex post sensitivity analysis the conclusions of such analyses are likely to differ from those employing models that accurately characterize society s joint preferences concerning time and risk especially when distributions are fat tailed using a dynamic stochastic general equilibrium model adapted from nordhaus s dice model we show that failing to accurately account for risk can lead to substantial underestimation of the net benefits of greenhouse gas abatement a robust finding of our analysis is that a lenient policy ramp emissions reduction strategy is preferable over a more aggressive strategy such as that advocated by the stern review only if the model does not account for uncertainty about the climate system the carbon cycle and economic damages and specifies a consumption discount rate that is counterfactually higher than the historical global weighted average cost of capital of 4 0 in the debate over uncertainty and time discounting our results imply that what matters most in climate change assessment is the inclusion and particular specification of uncertainty rather than the precise choice of discount rate

foreign aid and domestic savings a spurious correlation in the harrod domar atmosphere of the 1950s and 1960s foreign aid was expected to have a positive effect on saving the thinking at the time was that aid inflows would cause investment to increase this would generate subsequent increases in income which in turn would raise domestic savings k griffin and j enos pointed out however that the empirical correlation between foreign aid and savings across countries is negative not positive 1 to explain this they advanced the revisionist hypothesis that foreign aid actually discourages domestic savings aid receiving countries were seen as engaging in aidswitching increasing their government consumption expenditures reducing their efforts to collect taxes and so on contributions by a rahman t weisskopf and h chenery and p eckstein appeared to lend support to this point of view 2 the scenario was not universally accepted however several critics of the revisionist position advanced the hypothesis that negative association between savings and aid is the spurious result of omitted variables a plausible candidate is per capita income pci f stewart pointed out that high pci countries tend to have higher savings ratios and smaller current account deficits implying smaller aid inflows than low pci countries if aid were distributed according to need and per capita income were used by donors as an index of need aid and savings would have a spurious negative correlation because low pci countries simultaneously experience low savings rates and large aid inflows based on need 3 other possibly important omitted variables were cited by g papanek wars political disturbances sudden terms of trade changes natural disasters any of these variables could lower domestic savings and raise foreign aid receipts at the same time and they might or might not be correlated with per capita income 4 other studies

irreversibility and uncertainty cause an intergenerational equity efficiency trade off abstract two important policy goals in intergenerational problems are pareto efficiency and sustainability i e intergenerational equity we demonstrate that the pursuit of these goals is subject to an intergenerational equity efficiency trade off our analysis highlights two salient characteristics of intergenerational problems and policy i temporal irreversibility i e the inability to revise one s past actions and ii uncertainty of future consequences of present actions in human environment systems we employ a two non overlapping generations model that combines an intragenerational production decision on the use of circulating capital and a non renewable resource with a negative intergenerational externality as an unforeseen contingency if initially unknown problems become apparent and policy is enacted after irreversible actions were taken policy making faces a fundamental trade off between ex post pareto efficiency and sustainability that is one can achieve either one of these two goals but not both

sustainability constraints versus optimality versus intertemporal concern and axioms versus data sustainable sustained or survivable development are defined here as distinct sustainability constraints on intertemporal distribution in a context which ignores uncertainty environmental and intratemporal concerns such constraints are neither self contradictory nor redundant for they can conflict with maximizing the present value of utility optimality nor inferior since the axioms underlying optimality are ethically arbitrary and refuted by empirical psychological data axiomatic arguments may clarify but cannot resolve debates about intertemporal concerns data suggest that sustainability constraints are not respected and that intertemporal welfare functions containing a preference for sustained improvement may better reflect what bodies politic mean by sustainability

savings rates and income distribution further evidence from ldcs a cross country test for the existence of kaldor effects in less developed countries is developed earlier attempts have been inconclusive and have led to a perception that the effect is unimportant it is argued that previous tests may have ben misspecified within a standard life cycle framework a savings rate function that also incorporates two distribution variables one involving measures of income inequalities across income classes and the other a broad measure of inequalities among sectors was specified and estimated the results indicate that regardless of the inequality measure employed some sort of kaldor effect may be at work this suggests that the traditional conflect between growth and equity warrants continued investigation

sector level decisions in a sustainability constrained economy despite two decades of debate there remains little consensus about what sustainability is and how it should be achieved economists primarily portray sustainability as a macro level concern but there has been less attention on the implications of this social objective for policies related to the management of individual resources this paper derives guidance for sector level planning and project analysis from a macro level norm of intergenerational fairness optimal sustainable management involves making tradeoffs between sectors we derive a criteria for sector level planning and project analysis that help make those tradeoffs without losing site of the sustainability goal