market state and civil organizations in latin america beyond the debt crisis the context for rural development abstract the development strategy emerging in latin america implies a sharply redefined balance in the relative roles of the market the state and civil organizations market liberalization has been extensive and intense efforts have been undertaken to make the new rules credible the state has been divested of many productive and regulatory activities but descaling is a reflection of short run stabilization policies and signaling not of long term tendencies since an active state remains strongly in demand civil organizations are assuming active roles as alternative forms to produce and service members and as pressure groups agriculture has gained considerably from the policy reforms together with democratic representation and decentralization of governance this gives renewed opportunities for successful rural development initiatives

the environment and emerging development issues development economics for the most part has failed to recognize renewable environmental resources as economic goods yet the lives of the poor in developing countries are intimately tied to the fate of their local common property resources soil fuel wood water and so on ignoring the loss of common property renewable resources via degradation centralization or privatization in calculations of net national product can mask the destruction of resources available to a country s poor behind the false appearance of a growing national economy this paper describes the difference between the problem of managing local common property resources in developing countries and the problem of protecting the global commons such as the atmosphere and oceans it outlines the calculations that would include the local commons in the national income accounting of capital assets and argues that the interests of those most dependent on the increasingly scarce local commons will be best served by placing control in their hands while the central government provides infrastructure and educational support to control the pollution of the global commons on the other hand the paper sketches a plan in which most countries would have a high incentive to participate a global allocation of limited tradable permits to discharge defined pollutants

inflation growth and wage policy a brazilian perspective abstract a growth inflation model based on recent brazilian experience is developed the paper focuses on brazilian compulsory wage policy in order to analyse current stabilization policy issues in this context it is argued that orthodox stabilization policies as exemplified by an autonomous reduction in the rate of monetary growth implies both a temporary and a permanent decrease in output growth if the wage formula as in brazil provides for lagged price indexation the idea of promoting stabilization through full wage indexation is also examined

relative price effects of exchange rate depreciation in nigeria under fixed and fixed flexible mark up pricing regimes abstract the efficacy of exchange rate depreciation in altering the structure of relative prices varies with respect to the prevailing pricing regime especially in an economy such as nigeria s where production in all sectors depends directly or indirectly on imported intermediate inputs since the relative price effects of exchange rate depreciation in such circumstances cannot be determined a priori an input output price model useful for simulating the impacts of exchange rate depreciation on sectoral prices under alternative mark up pricing regimes is developed and simulated under fixed mark up pricing and mixed fixed flexible mark up pricing regimes the results show that exchange rate depreciation is likely to alter relative prices more under a mixed fixed flexible mark up pricing regime where the mark ups in petroleum utilities transport and communications sectors are fixed while mark ups in the other sectors are altered on the basis of the expected exchange rate in the next period

the direction of developing country trade empirical evidence of differences between south south and south north trade abstract declining market opportunities in northern markets led to views that greater south south trading might provide an alternative growth stimulus this paper analyses the characteristics of south south trade in manufactures and recent changes in the level of such trade to help clarify the potential of greater self reliance within the south south south trade is found to be more intensive in the use of both physical and human capital hence less rational from the static comparative advantage viewpoint than south north trade there is indirect but strong evidence that exporting countries with greatest orientation towards the south are those with greater distortions less rapid movements up the ladder of comparative advantage and weaker export performance finally it is observed that the recent boom in south south trade is largely explained by simple market size effects very rapid growth of rich oil exporters and the faster gnp growth of developing compared to developed countries the paper concludes that while south south trade of about the present magnitude one of greater developing country exports is certainly rational there is little evidence to support views that greater south south trade should be especially promoted arguments of dynamic comparative advantage may favor south south trade but so far these have been more speculative and not yet well researched empirically

quasi option value some misconceptions dispelled abstract we discuss a couple of important issues in the recent literature on quasi option value we show that the assertion that quasi option value can be negative in a model with independent learning is based on confusion between quasi option value which is always positive and the net benefit of preservation of a natural environment subject to development which is not we also explore the significance of different assumptions about the nature of learning and show that the result that quasi option value is positive is surprisingly robust

systemic crises in hierarchical ecological economies human beings are both the slaves and the masters of the ecosystems in which they live this paper examines the interrelationship be tween economic decision making hierarchies and ecological hierarchies conditions under which dis continuous changes can occur are presented both for top down and bottom up causes appropriate institutional arrangements for minimizing ecological disruption are analyzed and depend on the nature of the relationship between the economic and eco logical hierarchies in some cases this will involve self managed economic units operating at the ap propriate level of the ecological hierarchy jel q20

economics and sustainability balancing trade offs and imperatives the concept of sustainability has been increasingly invoked in scholarly and public policy debates discussion has been hampered however by uncertainty and lack of uniformity in the meaning of sustainability this paper seeks to identify some common ground among economists ecologists and environmen tal ethicists two issues seem salient require ments for intergenerational and the defi nition of social capital to be provided to future generations a concept of safe minimum standard which has received at least some recognition in the ecology philosophy and eco nomics literatures may provide the beginnings of a common ground for debate about sus tainability jel q2

adjustment policies in developing countries a reassessment this paper analyzes policy responses to external shocks of the 1973 76 and 1979 81 periods in developing economies grouped according to the level of industrialization and the policies applied it is shown that outward oriented economies relied largely on export promotion and import substitution to offset the balance of payments effects of external shocks in both periods inward oriented economies failed to apply such output increasing policies of adjustment rather they financed the balance of payments effects of external shocks by foreign loans in the 1974 76 period and had to take deflationary measures in 1979 81 when their increased indebtedness limited the possibilities for further borrowing the policies applied led to rates of economic growth substantially higher in outward oriented than in inward oriented economies with growth rates in 1983 averaging 5 percent in the first case and practically nil in the second

analysing disequilibrium exchange rate systems in developing countries abstract many developing economies have imposed quantitative restrictions on their international trade and tight control on capital movements disequilibrium balance of payments models developed to capture this restrictive trade regime demonstrate that the effects of a devaluation from an initial situation of disequilibrium with rationing can differ substantially from those predicted by traditional balance of payments models recent extensions to such models show that the effects of any policy measures depend critically on the initial disequilibrium conditions attempts at liberalizing trade and payments regimes have stimulated further analysis on the process of opening up a developing economy this work highlights the interaction between balance of payments current and capital accounts

intergenerational transfers and the social discount rate this paper investigates the relationship between intergenerational asset transfers and the choice of the discount rate for use in cost benefit analysis in a model of a competitive overlapping generations economy constrained by a socially managed exhaustible resource provided that there are no distortions in capital markets and that all agents hold perfect foresight cost benefit techniques will result in a pareto efficient resource allocation if the discount rate is set equal to the market rate of interest but since the path of the interest rate depends on the level of intergenerational transfers cost benefit techniques do not ensure a socially desirable distribution of welfare between generations a social optimum will result only if intergenerational transfers are properly chosen and enforced decentralized private altruism may result in intergenerational transfers that both present and future individuals would agree are too small if members of the present generation attach positive weight to the general welfare of future generations not simply their personal descendants in a world where intergenerational transfers are non optimal second best policy making may imply a constrained optimum that is inefficient together these findings suggest that cost benefit analysis is at best a partial criterion to policy formulation that should be used only in conjunction with ethical principles that define the proper distribution of welfare between present and future generations

evolutionary strategies in environmental policy abstract many of today s environmental problems can be attributed to a difference in the development of ecological and economic systems both kinds of systems develop over time but so far they have followed different organizational principles with respect to the basic factors energy matter information space and time the types of environmental problems encountered pose particular difficulties because of the different temporal and spatial characteristics of markets and ecosystems in the long run cultural evolution and hence economic development cannot progress without considering fundamental laws and principles of nature equilibrium oriented concepts in environmental economics aiming at the internalization of externalities do not offer adequate solutions to these problems policy approaches favouring environmental standards based on current knowledge and technology equally are of little help either the knowledge of complex interactions in natural systems is missing to exactly determine precise standards or past and continuing processes often time delayed make them obsolete chronic and pervasive environmental problems call for an enhancement of environmental policy that encompasses a process orientation while considering ecological principles of system development evolutionary strategies increasingly have to adapt economic patterns of development to ecological patterns of development environmental policy goals and corresponding instruments can be designed to continuously set signals for long term structural change the basic factor energy will be used to illustrate evolutionary strategies regarding direct and indirect effects an analysis of the scandinavian experience with carbon and energy taxes exemplifies first successful steps at implementation

abstraction tendencies and stylised facts a realist approach to economic analysis in his numerous methodological asides and assertions that feature in his more empirically oriented postwar contributions nicholas kaldor makes frequent reference to notions of abstraction tendencies and stylized facts however the employment of such terms seems rarely to be explicitly questioned justified or explicated this paper argues that such notions can be readily explicated and their employment justified through adopting an explicitly realist approach to economic analysis it is also argued that realism represents a serious alternative to current orthodox approaches to economics without suffering from some of the latter s more obvious limitations copyright 1989 by oxford university press

on the intergenerational allocation of natural resources it is known hartwick and others that under standard assumptions a society that invests in reproducible capital the competitive rents on its current extraction of exhaustible resources will enjoy a consumption stream constant in time it is shown here that this result can be interpreted as saying that an appropriately defined stock of capital including the initial endowment of resources is being maintained intact and that consumption can be interpreted as the interest on that patrimony this seems like a useful rule of thumb for policy

is the entropy law relevant to the economics of natural resource scarcity comment abstract jeffrey t young s critique of the work of nicholas georgescu roegen and herman e daly questions the relevance of the entropy law for economic analysis and provides a concise faithful summary of the positions of georgescu roegen and daly along the way however young produces an alternative model of natural resource depletion that is based upon questionable interpretations of the laws of thermodynamics in particular young s claim that natural resource economics can be divided into conservation law orientations and entropy law orientations and his claim that the entropy law pertains to energy but not to matter seem unsupportable from a scientific view

the origins of structuralism abstract starting out from i m d little s recent categorization of development economics as neo classical versus structuralist this article makes three points first it traces the origins of structuralism in this broad sense in the emergence of the doctrine of market failure in england during the 1930s and 1940s secondly it indicates the links between this line of thought and the latin american structuralist theory of inflation finally it takes up w a lewis s suggestion that the severity of the inflation problem in chile was due not so much to structural factors which it had in common with much less inflation prone ldcs but rather to the strength of organized interest groups making competing income claims

interests ideology and institutions a review of bhagwati on protectionism jagdish bhagwati widely known as one of the most outstanding trade economists but in fact an economist of much wider range has turned in this little book to the political economy of international trade based on the inaugural ohlin lectures at the stockholm school of economics this book reflects a dramatic shift in the theory of commercial indeed of economic policy that has occurred in recent years a shift to which bhagwati himself has made a central theoretical contribution this shift has taken the form of changing the way in which the government and hence economic policy is considered and modeled in economic theorizing for many years economists have been working with the assumption of the absent colleague when a correct policy was not implemented because political obstacles were in the way the economist would say it is not for me to identify these political constraints let the political scientist turn his mind to such issues but the colleague in political science would do his own thing and economically correct policies remained unimplemented we only heard from time to time complaints about lack of political will but this is not a helpful notion the phrase sometimes suggests that the good intentions are there but somehow the will to give them expression is missing but it is hard to believe that intentions not manifested in any way other than proclamations exist the phrase then comes near to being a tautology for the absence of will is also the absence of the action to express this will one does not have to be a behaviorist to believe that will must be expressed in action so that if there is no action ipso facto there is no will alternatively it might give rise to an infinite regress it would be of no use to exhort those without the will to muster the will for if the will to action is absent the will to will the will will also be absent attention should have turned to how to create the political base the alliance or coalition of interests to implement the reform eventually economists themselves started to think about the political economy of policy making theorizing about the invisible hand of the market was now supplemented by reflections on the nasty invisible foot of interest groups that trampled on and destroyed the beautiful work of the invisible hand the earlier economic writings did however contain an implicit theory of the state on this theory the state and the government like platonic guardians looked after the common interest the general welfare of the community as a whole whenever markets failed governments stepped in to correct these failures whenever markets were inadequate to pursue desirable objectives other than efficient allocation such as income redistribution conservation of the environment or the pursuit of cultural values the government saw to it that these objectives were included bhagwati calls it the puppet government view for government acts like a puppet of the economists according to this view government could do no wrong the new theory of pubiic choice has swung to the opposite extreme government can do no right it is simply the executor of the selfinterested pressure groups on whose support it depends and whose rent seeking distorts economic activity in directions far away from an efficient or equitable allocation of resources it should be noted that bhagwati in his exploration of directly unproductive profitseeking dup activities has both widened the concept of rent seeking and narrowed the scope of its damaging effects by showing that pace the public choice school in a distorted economy additional rent seeking or revenueseeking can increase welfare bhagwati examines the ideology interests and institutions that influenced and conditioned for nearly half a century attempts at trade liberaliza

indicators of sustainable development some lessons from capital theory abstract interest in sustainable development has prompted a search for suitable indicators that might complement or supplant the traditional measures of economic success although there is no agreement about the precise meaning of sustainable development one idea which is increasingly in good currency is that sustainable development requires that the stock of capital that one generation passes on to the next be maintained or enhanced further this stock of capital is seen by some to comprise two elements manufactured capital and natural capital the extent to which these are believed to be substitutes or complements is one factor which separates the neoclassical school from some of its critics a premise of this paper is that if capital theory is relevant to sustainable development then it should also be helpful in developing indicators however even within the normal confines of economics capital theory is not a homogeneous body of analysis therefore an exploration of capital theory and its relevance to sustainable development can be expected to generate various perspectives on those measures most useful for gauging the sustainability of economic activity it is these linkages between capital theory in various schools of thought and possible indicators of sustainable development that are the subject of this paper

green accounting and economic policy abstract through the lens of conventional national accounting resource depletion and natural environment degradation often appear misleadingly as desirable economic growth the old system of national accounts sna has been revised and a set of environmental satellite accounts proposed certain weaknesses however pervade the new proposals the conventional measurements remain largely unaltered and the satellite accounts are of unclear purpose and unnecessarily complex as proposed they rely on the valuation of environmental stocks while the economically more important flow accounts to their detriment are to be derived indirectly from changes in stock values the sna the paper stresses is primarily an economic framework incapable of capturing all environmental change and the national accounts are far more useful economically than environmentally greening the accounts would be optional for most affluent countries whose overriding environmental concern is pollution this can be addressed directly through taxation and regulation pollution information in satellite accounts can indeed be valuable but revised and fully integrated resource accounting is a priority concern for those developing countries that are running down natural resources and for which conventional accounting distorts macroeconomic measurement analysis and policy the paper argues that green accounting can only ensure income sometimes called weak sustainability which should be considered as a step leading ultimately to an ecological or stronger sustainability

the direction of trade past and present and the learning effects of exports to different directions abstract this paper looks at the direction of trade in manufacturer the pattern predicted by the hos model hasn r materialized but some sense of the historical pattern is made by looking at the distribution of world income as well as exporting countries policies and product composition given the historical pattern and in particular the direction of japan s trade it is argued that developing countries today are under exporting to one another this is to their detriment insofar as trade among less developed countries teends to be comprised of manufactures that are skill and learning intensive the scope for an increase in such trade is assessed

unconventional adjustment strategies for rural households in the less developed areas in greece abstract international competition in agricultural production is intensifying following the implementation of the 1993 accord of the general agreement on tariffs and trade the production of conventional farm products in surplus is being discouraged by means of indirect economic disincentives the common agricultural policy has already adjusted to unprotected national markets within the european union and greater market orientation is being achieved mainly through price reductions farmers in the less developed areas in greece where agricultural activity is still the main source of income and employment have been responding to policy reforms by seeking part time employment and income in non farm enterprises the adoption of alternative unconventional farm enterprises that use farm resources in an innovative and quantitatively different way does have the potential for bringing in a new source of income to farm business for the purpose of this research three adjustment strategies were recognised the conventional no change pathway is based on traditional region specific products production methods and services the adoption of the new crop pathway refers to the redeployment of resources into new agricultural products whereas farms on the market integration pathway redeploy resources into new marketing services and agricultural product processing on the farm the new crop and the market integration pathways are identified as unconventional adjustment strategies results derived from multinomial logit analysis highlight the major constraints and opportunities associated with the adoption of new crops and market integration practices farmers who have adopted unconventional practices are influenced by factors external to the farm such as contacts with institutions and have a high probability of having higher debts these farmers are likely to depend heavily on seasonal labour and rented land the fact that market integration activities are associated with smaller farms in conjunction with off farm work signifies the importance of establishing an integrated rural development policy approach public policy involvement in enhancing dissemination of information concerning unconventional enterprises is emphasised

research frontiers in the economics of climate change academic and policy debates over climate change risks and policies have stimulated economic research in a variety of fields in this article i briefly discuss eight overlapping areas of current research in which further effort is particularly warranted these areas include decision criteria for policy risk assessment and adaptation uncertainty and learning abatement cost and the innovation and diffusion of technology and the credibility of policies and international agreements further analysis in these areas not only will advance academic understanding but also will provide insights of considerable importance to policymakers

is sustainability optimal examining the differences between economists and environmentalists abstract this paper examines a number of possible explanations for the apparent differences between economists and environmentalists concerning economic growth and sustainable development some of the differences are well known and relate to issues such as resource scarcity intergenerational equity and the composition of social capital however our analysis finds that while economic notions of optimal growth and the techniques of benefit cost analysis have important advantages for evaluating complex tradeoffs because they are quantifiable they may have potentially serious drawbacks as well the paper focuses on two potential sources of bias in the use of welfare economics for social choice first there is a conservative reinforcement in benefit cost analysis which is likely to produce biases against policy interventions to protect a degraded environment second and perhaps more importantly the aggregation of individual willingness to pay as a measure of social benefits is shown to be invalid in the case of positional goods where the demand for the good reflects the desire of individuals to raise their own relative standing this error may cause the economic calculus to be biased against non positional goods including non rival goods such as environmental resources these biases further complicate the already strained assumptions in utilitarian based welfare economics that by relying on revealed preference and consumer sovereignty are unable to distinguish between or apply different weights to the satisfaction of different categories of preferences furthermore because the dynamic consequences of even small biases in judging social optimality may give rise to large social costs or advance an unsustainable path there is a danger in relying solely on a potentially biased measure of welfare as a basis for guiding social choice the paper concludes by suggesting that efforts to correct these drawbacks of economic analysis are likely to result in approaches to sustainable development that narrow the apparent differences between economists and environmentalists

the role of thermodynamics in the study of economic and ecological systems abstract economic theory has always maintained that economic value is generated solely within the economy where it is fully distributed among the factors of production before being consumed according to this theory the economy is an isolated system that does not need flows to pass across its boundaries in support of its steady state general equilibrium from a thermodynamic point of view this idea is unacceptable according to thermodynamic theory any open system which allows flows of matter and energy to cross its boundaries is capable of maintaining itself in steady state only because it transport value from its environment to restore the value that has been consumed within the system and dissipated drawing on the analogy with thermodynamics this paper replaces the traditional systemic analog of the economy which is the closed circular flow process with the steady flow process according to this analog any efficient economy is an open system both physically and economically requiring a flow of economic value to maintain its steady state in other words an economically isolated system has to be inefficient and is bound to misallocate and overuse environmental resources whether the economy behaves as an economically isolated inefficient or open efficient system is an empirical question however if real economies are economically open and efficient and environmental resources are abused due to the economy s unrestrained material growth parts of traditional economic theory espicially those related to benefit evaluation will have to be modified policy recommendations will be affected in any case because internalization the panacea of resource misallocations cannot be more than a temporary solution instead of opening the economy internalization encloses the harmed resource and saves it by abusing excessively other environmental resources

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

microcomputer based input output modeling applications to economic development input output i o analysis is widely used to analyze and shape policies until recently i o models could be run only on mainframe computer systems but with advances in microcomputing i o analysis is now possible for colleges agencies and local governments which lack access to mainframe computers this book provides a synthesis of information about these models for economists planners and consultants both in government and in the private sector

on sustainability and the economics of survival this paper investigates the implications of sustainability and survival strategies for economic analysis it reviews connections between the approaches used by economists and biological scientists in the study of survival the paper emphasizes the role of irreversibility and uncertainty in the investigation of sustainability issues implications of the results for the analysis of economic behavior are discussed

choices without prices without apologies valuing is usually regarded as a process of compressing information about attributes into a single metric armed with this reduced form of compact information the consumer can consider a particular object with a particular price attached or implied and make an informed decision but the process of valuing is less straightforward than we ordinarily suppose when environmental goods and services become the object of information compaction it is possible that important information is lost we comment on the choice problem germane to environmental goods and services and challenge the presumption that environmental choices made without explicit pricing are inferior to those in which hypothetical valuation studies are undertaken

net national product as an indicator of sustainability net national product nnp can potentially serve several objectives among others to measure value added and to be an indicator of welfare in the aftermath of the world commission on environment and development however it also seems important to investigate whether the concept of nnp can serve as an indicator of sustainability my point of departure following hicks 1946 ch 14 is therefore to require that nnp should measure what can be consumed in the present period without reducing future consumption possibilities and in line with this to argue that the nnp should equal the maximum per capita consumption level that can be sustained if sufficiently many facilitating assumptions are made then a concept of nnp that serves as an exact indicator of sustainability can easily be constructed for instance for a closed economy with a constant population a stationary technology and with only one capital good it follows that the present does not reduce future consumption possibilities if and only if it does not decrease the stock of the single capital good hence under the assumption that the one capital good k is identical to the one consumption good x nnp defined as y x k measures the maximal sustainable consumption at time t because then x y is equivalent to k the purpose of this note is to establish that with multiple capital goods it is not in general possible to construct an exact indicator of sustainability on the

intergenerational competitive equilibria under technological uncertainty and an exhaustible resource constraint abstract this paper presents a model of competitive intertemporal equilibrium in a finite horizon overlapping generations economy facing technological uncertainty and an exhaustible resource constraint individuals form rational expectations regarding future prices and economic conditions and income is redistributed from one generation to the next through government mandated lump sum transfers under uncertainty the relationship between resource price appreciation and the interest rate is mediated by consumers risk aversion with respect to consumption in alternative states of nature the intuitively appealing proposition that the expected resource price rises at the expected rate of interest holds only as a special case if future generations are taken to be state contingent in the sense that their composition depends on the states of nature prevailing when they are born then equilibria are generally pareto efficient but if future generations are state independent so that the set of individuals born at a given date is independent of the prevailing state of nature then equilibria may be inefficient because markets do not exist where successive generations may equilibrate their marginal rates of substitution across consumption in alternative contingent states such inefficiencies may be remedied through the implementation of appropriate intergenerational transfers an optimal intergenerational welfare distribution may be supported as a competitive equilibrium if the income transfer regime is properly selected and enforced the social optima that result for a simple version of the model under the maximin welfare criterion indicate that greater sacrifices are required on the part of the present generation when future generations are taken to be state contingent than when they are regarded as state independent this finding provides a possible explanation for the extreme risk aversion of conservationists with respect to the welfare of future generations

capital theory and the measurement of sustainable development an indicator of weak sustainability the measurement of sustainable development is not without considerable difficulties yet this should not detract from the positive advances that can be made in this direction in this paper we present one form that a weak sustainability indicator can take derived from a simple but intuitive savings rule it incorporates the idea that the level of overall capital stock should be non decreasing although subject to qualification at this stage some interesting results emerge from the application of the rule to 18 countries

conservation of mass and instability in a dynamic economy environment system abstract this paper considers a variant of the neumann leontief sraffa general equilibrium models in the context of a jointly determined economy environment system subject to a conversation of mass condition it shows that the conservation of mass contradicts the free disposal free gifts and non innovation assumptions of such models that an expanding economy will be associated with continuous disequilibrating change in the material transformations of both economy and environment and that this change is uncontrollable through the price system

economics for sustainable rural systems abstract critics often reproach the discipline of economics for supporting developments that result in environmental and social degradation this article identifies where such censure is valid but proceeds to argue that the rationale underlying economic techniques is at fault rather than the techniques themselves within the rural context we suggest that economics can make a valuable contribution to the design and achievement of sustainable ways of living valid criticism of economics focuses on its assumptions about value since this has led to emphasis of favourable effects of markets and laissez faire policies exposing rural areas to more rigorously competitive market conditions encourage their transformation by increasing mechanisation industrialisation and a less sustainable use of resources new approaches and policies are required if different outcomes are to be achieved an initial step is to identify desirable outcomes a matter of social choice however society makes multiple demands on rural resources and such issues cannot be adequately captured within a neo classical welfare model an alternative hierarchical framework in the tradition of systems thinking capable of analysing the complex relations associated with rural resource use provides appropriate emphasis to the economic links between goals at different levels within the system and appears to have some heuristic value an empirical counterpart of the hierarchical framework input output analysis generates information to support social choices and can also contribute to the understanding of economic systems and their interaction with the wider social cultural ethical and environmental universe the article concludes with some revised economic policy prescriptions to promote rural sustainability

towards an ecological economics of sustainability abstract persistent disagreement both as to the interpretation to be given to sustainability and as to the relation between ecological and economic sustainability has hindered the development of an ecological economics of sustainable resource use this paper identifies the main concepts of sustainability deriving from the two disciplines in order to explore the difference implied by an ecological approach to the problem it is argued that present economic and ecological approaches are largely disjoint and that they address basically different phenomena by combining the efficiency requirements of what is usually thought of as economic sustainability with the stability requirements of an ecological approach it is shown that an intertemporally efficient allocation of resources that satisfies the conditions for constant levels of consumption is not necessary to assure ecological sustainability ecological sustainability requires that the allocation of economic resources should not result in the instability of the economy environment system as a whole

governing uncertain and unknown effects of genetically modified crops this paper analyzes the capabilities of three different governance regimes for adequately handling uncertain and unknown effects of genetically modified gm crops adequate handling requires the development of sound procedures for identification of uncertainty and ignorance ui gm crops are produced by private firms and the government decides whether the crops should be marketed gr2 and gm crops are produced and the government decides whether the crops should be marketed gr3 the effect of bringing the civil society into the decision making process is also analyzed gr3 will be stronger in cooperative adaptation and communicative rationality than gr2 public research organizations have fewer conflicts of interest with the government than private firms and academic norms are important difficulties in proving harm and identifying the responsible firm will make gr1 weak in cooperative adaptation and communicative rationality

recasting alternative agriculture as a management model the value of adept scaling abstract this paper identifies the significance of scale considerations as applied to agricultural resource management scaling is the act of defining the spatiotemporal level or levels of interest when attempting problem solving a goal commonly proposed by the diverse interests working toward an alternative agriculture is sustainability to date advocates of sustainability have failed to scale meaningfully both their critique of conventional agriculture and the alternatives they represent because sustainability is inherently sensitive to changes in analytic context i e is scale relative in the absence of explicit scaling sustainability is unworkable as a measure of system performance the importance of scale as applied to the concept of sustainability in hierarchical systems has been noted lowrance et al 1986 am j altern agric 1 169 173 however the implications of this finding have not been confronted in the subsequent literature going beyond lowrance et al 1986 this paper describes the error that accompanies improperly scaled assessment of agricultural sustainability and identifies two important considerations that emerge through explicit scaling 1 the necessity of consistent and timely integration of local information into upper level decision making and 2 the necessity of recognizing the scalar level of the downside of resource allocation trade offs and addressing them accordingly the first of these considerations suggests the need for agricultural systems that are resilient to collapse from unpredictable and potentially fundamental disturbance through incorporation of local information it is possible to maintain coherent strategies aimed at upper level objectives e g biodiversity conservation while supporting the integrity of lower level sub systems e g community economic vitality the second consideration that arises from explicit scaling indicates the value of developing systems which are buffered against political paralysis caused by negative impacts of resource allocation decisions victims or losers result from allocation and reallocation functions these individuals and or institutions must be addressed recent enthusiasm regarding win win scenarios in many cases is buoyed by scaling error explicit recognition of the implications of necessary trade offs both positive and negative promotes the development of mechanisms to support losers failure to confront the fact that losers are consistently produced exaggerates the negative impact they have on system performance we define holistic management as identifying assimilating and acting on information in a manner consonant with the contextual spatiotemporal scale of the problem at hand the fundamental challenge facing agriculture is integration of multiple considerations across levels in the system explicitly scaled analysis and action in a holistic setting is proposed as a means by which alternative agriculture can respond to this challenge

entitlements missing markets and environmental uncertainty reply abstract at one level dore and ward seem intent on immunizing received doctrine they say that i did not prove that rights violated nozick s principles of justice and that i did not prove that missing markets were the problem more telling they allege i did not prove that my story was better than the particular story favored by dore and ward that is they argue that there is an alternative approach based on the theory of public economics which is indeed operational 3 they then use the bulk of their comment to explain and defend this alternative model they hope to convince the reader that the model of public economics survives intact in the face of my alternative model to the extent that their model allows one to define the problem away it is not difficult to see why they find it so compelling more seriously dore and ward fail to make a coherent argument about the concept of rights and duties and the logic of a particular rights structure that happens to prevail they seem concerned that my article was tampering with some sacred social construct the status quo rights structure and that my article threatened the received wisdom of both public economics and paretian walrasian bliss indeed theirs seems to be a genuine fear that if economists release their grip on the certitude of received orthodoxy the floodgates will be open to all manner of bumbling regulators seeking to shift rights and wealth positions across generations my article is apparently threatening because it seems to suggest that the received wisdom may at times be misleading

intergenerational resource rights efficiency and social optimality the discipline of economics is generally defined as the science of the allocation of scarce resources between competing social objectives given an initial distribution of resources between economic agents how would they behave so as to improve their welfare according to the pareto criterion the agents would exchange commodities until the opportunities for fruitful exchange were fully exhausted and no agent could be made better off without rendering at least one other agent worse off pareto efficiency is a powerful concept in microeconomic analysis provided that the initial distribution of property rights is equitable allocative efficiency gives rise to the best of all possible worlds acknowledging that the assumptions of perfect competition are often violated firms are monopolistic information is incomplete and externalities exist economists have argued for the modification of institutions so that economic reality will conform more closely to the assumptions of the model that yields such gratifying results but microeconomic theory has always maintained that allocative efficiency is in itself insufficient to maximize social welfare bator 1957 a social welfare function is required to discriminate a social optimum among the array of efficient allocations that correspond to alternative assignments of property rights though economists have posited alternative functional forms for the sake of pursuing conceptual arguments welfare functions have remained elusive constructs for well known theoretical and practical reasons consequently a sharp line of demarcation has been drawn between questions of efficiency the province of economics and equity the principal focus of ethical and political discourse in resource economics however the line demarcating efficiency and equity is often crossed the term optimal depletion appears regularly where only efficient depletion is meant while political debates about resource exploitation over time are laden with questions of the proper distribution of our natural patrimony between generations resource economists have predominantly espoused particular use rules that guarantee efficiency but overlook potential improvements in social welfare achievable through the reassignment of property rights across generations we document the evolution and current status of the misuse of the term optimal depletion in section ii we develop a simple two generation three period general equilibrium model in section iii to illustrate how alternative distributions of resource rights between generations relate to alternative pareto efficient solutions in section iv we demonstrate how different social welfare functions affect the optimal solution and associated assignment of resource rights between generations

the state and industrial strategy abstract the debate about the role of the state in promoting industrial growth in developing economies is reviewed we begin with the ideas of the early development economists of the 1950s and 1960s then take up two waves of neoclassical criticism respectively emphasizing the primacy of the market and the lack of autonomy and competence of the developmentalist state and sketch the elements of a countercritique the fact that all successfully developing economies apply industrial strategies incorporating institutional change is emphasized and boundary conditions and lessons from experience which delimit sensible strategic choices are pointed out

measures of energy cost and value in ecosystems the physical output of ecological processes have different values even though they may be measured in the same physical units using linear input output theory we derive a set of weights based on direct and indirect energy requirements for ecosystem commodities which uniquely converts them into commensurable unit costs under certain conditions these costs are equal to values or prices using this system behavioral theories can be better posed for experimental verification

exports growth and causality in developing countries abstract previous empirical studies have interpreted results in regressions of output variables on export variables as providing support for an export promotion development strategy such an interpretation is questionable since these regressions provide no means of determining the direction of causality this paper performs causality tests between exports and growth for 37 developing countries the results cast considerable doubt on the validity of the export promotion hypothesis

farming and the countryside an economic analysis of external costs and benefits changing nature of rural land use the economics of non point pollution control from agriculture pesticide regulation in denmark soil erosion and conservation policies in the usa economics of nitrate pollution control in the uk animal waste problems in the netherlands atrazine pollution and chesapeake fisheries nitrate pollution and fisheries protection in sweden the provision of public goods how should it be arranged economic analysis of management agreements land purchase as a means of ensuring the provision of public goods land diversion programmes as generators of public goods measuring environmental amenity benefits of agricultural land agriculture and the environment the way ahead

trade policy and growth of developing countries some new data abstract the present study provides empirical evidence on trade policy and economic growth of developing countries our data indicate that adverse changes in world demand carried greater weight in determining export performance than changes in trade policy the results presented confirm that high growth rates of export earnings occur only when external demand to strong low income countries are shown to fare worse across all time periods though there are regional variations these are not due solely to differences in trade policy thus an outward oriented policy is not necessarily a valid policy recommendation for all conditions and all countries

trade patterns in developing countries 1964 82 this paper presents a regression analysis of import and export shares of gdp for 14 commodity and service categories in 55 developing countries over the period 1964 82 explanatory variables include gnp per capita population domestic capacity utilization the effective exchange rate and oecd real gnp for exports among other findings it is shown that countries trade patterns are not closely related to their growth performance and that developing countries on average run surpluses of exports over non capital goods imports on merchandise trade the current commodity surplus is required to offset imports of capital goods and a structural deficit on factor and non factor service trade

harvesting and conserving a species when numbers are low population viability and gambler s ruin in bioeconomic models abstract in bioeconomic models of renewable resources population viability is either ignored entirely or the minimum viable population mvp is considered a crisp threshold below which a species is driven to extinction neither is consistent with ecological science the purpose in this paper is firstly to enhance ecological realism in economic models by incorporating insights regarding population viability from conservation biology we consider the effects of chance on optimal management and briefly discuss key results regarding population viability as derived by biologists second as a means to balance interests and morality we suggest a fuzzy compromise between the economist s and the biologist s preferred stock sizes

a dynamic hierarchical approach to understanding and managing natural economic systems the study of economic systems and their guidance towards sustainability can be enhanced by understanding how natural systems use materials and energy at various levels of system organization how these levels interrelate and how interrelationships change towards this end the paper introduces natural economics as an approach to understanding the dynamics of hierarchical systems we define the concepts of natural economics to facilitate the description and assessment of system change and present dynamic modeling as a method for empirical research and as a tool for management decision making we illustrate with empirical applications the use of dynamic modeling at various levels of system organization empirical illustrations range from dynamic models of simple physical systems of material transport energy degradation and self organized criticality to models of complex industrial systems such as us iron ore mining and steel production the insights derived from the natural economics approach are used to draw conclusions for the study and management of economy environment interactions

valuing cattle on mixed smallholdings in the eastern amazon abstract cattle on smallholder farms are kept for socio economic reasons rather than physical production which explains why farmers favour low input and discontinuous management to find out how this form of livestock husbandry relates to the other main farming sub systems cattle keeping was compared with cassava and black pepper production data was collected from 37 cattle keeping mixed smallholdings during 15 visits at monthly intervals the three sub systems were studied in terms of productive efficiency of resource use socio economic contribution and ecosystem friendliness using cash flow non market output and non parametric rankings their relative performances in each domain were ranked and put on an amoeba diagram a general method of system description and assessment the markings connected across functions produced an outline of a polygon reminding the shape of an amoeba it was found that productive efficiency was lowest in cattle benefit cost ratio was highest in cassava while return to labour was especially strong in black pepper production the highest status lowest production risk highest liquidity and ease of sale related to cattle cattle and pastures ranked worst in terms of biodiversity damage to and pollution of water courses nutrient losses were highest in cassava due to the large amount harvested the differences in function meant that the three polygons occupied different segments of the circular diagram nevertheless together they formed a well rounded shape the amoeboid nature of these polygons can be used to predict the effect of a shift of activity on the farm making the diagram a useful illustrative tool for planning and teaching

trade strategy in medium term adjustment abstract trade strategy is prominent in current discussions of stabilization and adjustment the orientation of trade strategy can be categorized according to revealed trade performance or characteristics of incentive structures or the nature of the main policy instruments the record of trade stratedy in developing countries has been richer and more complex than currently fashionable dichotomous categorizations in terms of inward or outward orientation suggest many trade strategy and policy issues remain unsettled these include the effects and optimal timing of import liberalization the appropriate instruments for export promotion trade policy concomitants of productivity change and interactions with microeconomic experience and policies among others more country specific and industry specific empirical research is necessary

is free trade passe abstract if there were an economist s creed it would surely contain the affirmations i understand the principle of comparative advantage and i advocate free trade yet the case for free trade is currently more in doubt than at any time since the 1817 publication of ricardo s principles of political economy and this is due to changes that have recently taken place in the theory of international trade while new developments in international trade theory may not yet be familiar to the profession at large they have been substantial and radical in the last ten years the traditional constant returns perfect competition models of international trade have been supplemented and to some extent supplanted by a new breed of models that emphasizes increasing returns and imperfect competition these new models call into doubt the extent to which actual trade can be explained by comparative advantage they also open the possibility that government intervention in trade via import restrictions export subsidies

the conditions for achieving environmentally sustainable development this paper is interested in the narrower interpretation the relationship between environmental quality and sustainable economic activity the latter is interpreted as that level of economic activity which leaves the environmental quality level intact with the policy objective corresponding to this notion being the maximization of net benefits of economic development subject to maintaining the services and quality of natural resources over time 3

economic reform in developing countries some conceptual issues abstract this paper is an effort to show that the outcome of stabilization and structural adjustment policies largely based on the neoclassical economic rationale was justifiable neither in terms of the analytical nor the historical literature the very ideological nature and the inherent contradictions of policies inhibited successful implementation and accentuated poverty and inequity in developing countries by drawing on the views of various contemporary schools of economic thought the paper also questions the validity of the international financial institutions claims of consensus on development policy the paper emphasizes that in social science research and more so in policy prescriptions the search for consensus may in fact be futile

impact of rural industrialization on village life and economy a social accounting matrix approach the effects of decentralization of industries on rural development is one of the neglected topics in the recent development literature of india the impact of industrialization was studied intensively in the early 1970s when the second and third five year plans were emphasizing creation of large industrial units especially basic industries it was observed that such industrialization did not have much effect on rural development industrialization was taking place in a few pockets having little impact on the surrounding areas the industrial scene in the 1990s is quite different instead of basic industries chemical engineering and consumer goods industries dominate the scene industries are being established outside the megalopolies many small industrial towns have come into existence and the process of rural industrial decentralization appears under way so far there has been little analysis of how such decentralization of industries is affecting rural growth and development some indications of the impact do exist in the literature but they do not take into account important factors such as the development of the service sector around the factory and the changes in the village employment structure and in the socioeconomic fabric of village life 2 in this study we attempt to revive the debate on the impact of decentralization of industries on rural development we compare two relatively similar indian villages one close to a factory boriya and another located in a remote area aurepalle to provide insights on the socioeconomic effects of industrial decentralization field surveys of socioeconomic characteristics of households were conducted in both villages to understand better how people s outlook the employ