forest incomes and rural livelihoods in chiradzulu district malawi abstract this paper examines forest income among rural dwellers in one of malawi s most densely populated districts chiradzulu 160 households were interviewed in two sites only 20 km apart purposely selected on the basis of access to a forest reserve people are extremely poor with 97 having incomes of less than 1 usd day forest income constitutes around 15 of total income only non farm income 47 and agriculture 28 rank higher the poorest segment depends more on forest income than the least poor group but the medium income group exhibits the highest dependence fuelwood constitutes the major source of such income followed by fodder the incomes mainly support current consumption people with better access to the forest reserve have higher total income forest income and relative forest income as revealed through a gini coefficient analysis forest resources have an important income equalizing effect across rural households a particular group of resource poor farmers 8 1 of sample with little access to agricultural land and a high representation of female heads derives an average of 65 of their income from the forest an important policy lesson is that restricting people s access to forest resources can have substantial effects on household livelihoods and welfare and would serve to increase income inequalities in the area livelihood researchers should now recognize the substantial income from forest resources

institutional constraints and deforestation an application to mexico 1 introduction in many tropical regions a key factor influencing deforestation is thought to be the lack of effective property rights and other institutional structures controlling access to and use of forests 1 where such institutions exist they limit access to and conversion of forest land thus acting as a deterrent to deforestation in the absence of formal ownership rules traditional common property regimes in some forested regions have also proven to be effective in controlling the open access deforestation problem gibson 2001 larson and bromley 1990 richards 1997 in short formal and informal institutions can influence the process of forest loss by imposing increased costs of conversion on farmers who clear forest land this article is concerned with analyzing the role of formal and informal institutions as constraints on the conversion of forest land to agriculture in developing countries the perspective on institutions adopted here follows the approach of north 1990 who defines institutions as humanly devised constraints that shape human interaction and that affect the performance of the economy by their effect on the costs of exchange and production in analyzing the relation between institutional constraints and the amount of forest land converted for use by smallholders this article makes several contributions first it demonstrates that if institutions raise the costs of land conversion then it is possible to utilize an agricultural household model to formalize the resulting impacts on the amount of converted land used by all farming households moreover the equilibrium level of land cleared will differ under conditions of no institutional constraints that is the pure open access situation compared to c onditions where effective institutions exist to control land conversion because institutions raise the cost of land clearing more land should be converted under pure open access 2 this in turn implies that the existence of institutional constraints prevents the adjustment of the stock of converted land to the long run equilibrium desired by agricultural households which is the amount of land that could be cleared under open access a dynamic panel analysis is therefore employed to test the hypothesis that the presence of institutions to control agricultural conversion can significantly affect deforestation the model of land expansion is applied to the case of mexico in the pre nafta north american free trade agreement reform era 1960 85 during this period the existence of ejido or communal land ownership for the vast majority of forest land meant that strong institutional controls may have restricted the rate of adjustment in the amount of new land converted and thus limited agricultural expansion sarukhan and larson 2001 the analysis also has direct relevance for the post nafta period particularly because the 1992 land reforms sanction changes in the traditional ejido land ownership structure ii a pure open access model of forest land conversion the following model of forest conversion is based on an approach similar to that of cropper et al 1999 lopez 1997 1998a and panayotou and sungsuwan 1994 assume that the economic behavior of all j rural smallholder households in the agricultural sector of a developing country can be summarized by the behavior of a representative jth household although the representative household is utility maximizing it is a price taker in both input and output markets farm and off farm labor of the household are assumed to be perfect substitutes such that the opportunity cost of the household s time i e its wage rate is exogenously determined the household s behavior is therefore recursive in the sense that the production decisions are made first and then the consumption decisions singh et al 1986 in any time period t let the profit function of the representative agricultural household s production decisions be defined as 1 max pi p w w

on the use of econometric models for policy simulation in marketing abstract in this article the author discusses the properties of useful econometric models for marketing phenomena with particular attention on models for policy simulations the author addresses model diagnostics parameter stability exogeneity and the lucas critique he also presents the results of a search through the 1998 2003 issues of the journal of marketing research finally the author offers practical guidelines

taking account of governance implications for land use dynamics food prices and trade patterns deforestation mainly caused by unsustainable agricultural expansion results in a loss of biodiversity and an increase in greenhouse gas emissions as well as impinges on local livelihoods countries governance performance particularly with respect to property rights security exerts significant impacts on land use patterns by affecting agricultural yield related technological investment and cropland expansion this study aims to incorporate governance factors into a recursive agro economic dynamic model to simulate governance impacts on land use patterns at the global scale due to the difficulties of including governance indicators directly into numerical models we use lending interest rates as discount rates to reflect risk accounting factors associated with different governance scenarios in addition to a reference scenario three scenarios with high low and mixed divergent discount rates are formed to represent weak strong and fragmented governance we find that weak governance leads to slower yield growth increased cropland expansion and associated deforestation mainly in latin america sub saharan africa south asia and southeast asia this is associated with increasing food prices particularly in sub saharan africa and southeast asia by contrast strong governance performance provides a stable political and economic situation which may bring down deforestation rates stimulate investment in agricultural technologies and induce fairly strong decreases in food prices

an economic analysis of shrimp farm expansion and mangrove conversion in thailand we analyzed the factors determining mangrove conversion by shrimp farmers in the coastal provinces of thailand between 1979 1996 the profit maximizing behavior of a shrimp farmer converting mangrove area under open access conditions is modeled aggregate mangrove clearing by all farmers in coastal areas is empirically estimated through a provincial level panel analysis the price of shrimp minimum wage distance from market ammonium phosphate price used for feed population growth gross provincial product and the density of shrimp farms influence mangrove clearing and shrimp farm expansion based on the analysis various policy options to control mangrove deforestation in thailand are reviewed

deforestation and the rule of law in a cross section of countries relationships between deforestation and population pressure income growth and insecure property rights are examined with data from 120 countries insecure property rights are hypothesized to arise from two sources government instability or inability to enforce ownership and an absence of government accountability the former source is captured by measures of general lawlessness such as guerrilla warfare revolution and frequent constitutional change the latter is proxied by variables indicating the type of government executive frequency of political purges and the existence of an elected legislature general support is indicated for the property rights hypothesis and for the effects of population growth

third world debt and tropical deforestation abstract the deforestation and degradation of tropical forests are taking place at an extremely rapid pace according to the food and agriculture organization fao the estimated annual rate of tropical deforestation during the 1981 1985 period was 113 846 square kilometers or 0 6 of the 1981 total forested area the implications of the loss of these forests are staggering myers n 1989 deforestation rates in tropical forests and their climatic implications friends of the earth london tropical forests are extremely rich ecosystems which support a disproportionately large share of the world s plant and animal species forests play a crucial role in both nutrient and hydrological cycling and may provide sustainable economic benefits through managed harvesting of timber and the collection of non timber products such as fruits nuts and rubber also deforestation is a significant source of global warming through its effects on the global carbon cycle this paper focuses on the relationship between debt and deforestation examining conceptual and empirical arguments that debt is a source of deforestation pressure our study develops a behavioral model which suggests that debt can lead to myopic behavior leading to deforestation rates that may not be optimal in the long run but are necessary in the short run to meet current constraints then country by country data on debt deforestation and other variables are analyzed with regression analysis it is shown that debt is significantly correlated with deforestation under a wide variety of assumptions and specifications our results indicate that debt is an important factor in the deforestation of tropical countries there are certainly other sources of deforestation both micro and macroeconomic which may vary significantly from country to country however we focus on debt because of its dominant role in the economies of developing countries and because of the increased use of debt for nature swaps the link between debt and deforestation that is suggested in this paper implies that debt for nature swaps may have a dual effect on deforestation first the contractual agreement is designed to preserve forests as part of the swap second the reduction in debt may itself reduce the pressure to deforest although this indirect effect is small our research provides evidence that reducing debt reduces deforestation which may be an argument to offer deforesting third world countries some form of debt relief and to utilize more fully debt for nature swaps as a tool for preserving environmental quality

playing games in the forest state local conflicts of land appropriation this paper explores possible strategic interactions between the state and local community in games of tropical forestland appropriation three typical cases are discussed corresponding to a development over time of increased resource competition and market integration the local response to more state deforestation depends on the costs market and behavioral assumptions and less on the structure of the game cournot or stackelberg the state fuels local deforestation by providing infrastructure roads which reduces the net costs of agricultural expansion or when markets are imperfect and local behavior determined by survival needs the game structure is however important for total deforestation this paper explores possible strategic interactions between the state and local community in games of tropical forestland appropriation three typical cases are discussed corresponding to a development over time of increased resource competition and market integration the local response to more state deforestation depends on the costs market and behavioral assumptions and less on the structure of the game cournot or stackelberg the state fuels local deforestation by providing infrastructure roads which reduces the net costs of agricultural expansion or when markets are imperfect and local behavior determined by survival needs the game structure is however important for total deforestation

endogenous property rights regimes common pool resources and trade a model is developed where opening to trade affects a dynamic common pool resource stock and welfare through a community s voting decision to institute a property rights regime regulating the stock the model finds that resource stock levels can decline even when a markov perfect equilibrium path for labor and property rights regimes are chosen to maximize welfare thus opening to trade can be welfare maximizing even when resource stock declines experimental results show that under certain conditions subjects briefly follow a markov perfect equilibrium path for property rights regime choice but labor allocations are myopically chosen indicating that some resource dynamics may be considered by subjects

growth deforestation and the efficiency of the redd mechanism this paper assesses the long term impacts of an international transfer called the reduced emissions from deforestation and degradation redd mechanism which aims at preserving tropical forests of the recipient economy this two sector economy faces a dilemma between economic growth and deforestation the rural sector can substitute reproducible capital for agricultural land whereas the manufacturing sector only requires capital the model shows that the redd mechanism has a non monotonic effect on steady state welfares for low transfer schemes the agricultural output increases with the transfer even though less land is under cultivation for high transfer schemes the increase in the transfer may not offset the decrease in the agricultural output the open loop symmetric nash equilibrium in a dynamic deforestation game predicts that redistributing the transfer among a finite number of producers is less efficient in reducing deforestation than in the social optimum

agricultural household models extensions applications and policy this book presents the basic model of an agricultural household that underlies most of the case studies undertaken so far the model assumes that households are price takers and is therefore recursive the decisions modeled include those affecting production and the demand for inputs and those affecting consumption and the supply of labor comparative results on selected elasticities are presented for a number of economies the empirical significance of the approach is demonstrated in a comparison of models that treat production and consumption decisions separately and those in which the decisionmaking process is recursive the book summarizes the implications of agricultural pricing policy for the welfare of farm households marketed surplus the demand for nonagricultural goods and services the rural labor market budget revenues and foreign exchange earnings in addition it is shown that the basic model can be extended in order to explore the effects of government policy on crop composition nutritional status health saving and investment and to provide a more comprehensive analysis of the effects on budget revenues and foreign exchange earnings methodological topics primarily the data requirements of the basic model and its extensions along with aggregation market interaction uncertainty and market imperfections are discussed the most important methodological issues the question of the recursive property of these models is also discussed

forest clearing in rural livelihoods household level global comparative evidence summary this paper examines the factors that influence rural household decisions to clear forestland we use a large dataset comprising 7172 households from 24 developing countries twenty seven percent of sampled households had converted forest to agriculture during the previous 12 months clearing on average 1 21 ha male headed households with abundance of male labor living in recently settled places with high forest cover unsurprisingly tended to clear more but regional peculiarities abounded households with medium to high asset holdings and higher market orientation were more likely to clear forest than the poorest and market isolated households questioning popular policy narratives about poverty driven forest clearing

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

the effect of labor market performance on deforestation in developing countries under open access an example from rural nepal abstract this research examines the deforestation behavior of smallholder agriculturalists as off farm labor market conditions change a model of a representative village is proposed which incorporates dependence on open access forests for fuelwood and animal raising dynamic simulations are then presented which compare time paths of forest stocks deforestation levels and household labor supply under a variety of conditions despite the open access regime assumed in the model with a perfect albeit low wage off farm labor market the agro forestry system in nepal is basically stable an alternative model where there is no off farm labor market eliminates the important features of adjustment to deforestation which generate forest stability suggesting that the availability of off farm opportunities is an important determinant of deforesting behavior and equilibrium forest stock levels

the inconsistency of land values land rents and capitalization formulas this paper examines relationships that exist between farm income land values and capital asset pricing theory using two commonly referenced data sets it is shown that land prices and land rents do not have the same time series representations a necessary condition for the simple capital asset pricing theory to hold this suggests that a fundamental rethinking of the way in which land prices are viewed and modeled is needed more complex models that allow for rational bubbles risk aversion and future shifts in government policy or commodity prices may be required

ethanol production food and forests this paper investigates the direct and indirect impacts of ethanol production on land use deforestation and food production a partial equilibrium model of a national economy with two sectors and two regions one of which includes a forest is developed it analyses how an exogenous increase in the ethanol price affects input allocation land and labor between sectors energy crop and food the total effect of ethanol prices on food production and deforestation is decomposed into three partial effects first the well documented effect of direct land competition between rival uses arises it increases deforestation and decreases food production second an indirect displacement of food production across regions possibly provoked by the reaction of international food prices increases deforestation and reduces the food sector s output finally labor mobility between sectors and regions tends to decrease food production but also deforestation the total impact of ethanol production on food production is negative while there is an ambiguous impact on deforestation

natural resources agriculture and property rights abstract the study explores empirically forest resource and soil quality degradation under different property rights regimes in a subsistence agriculture framework the quantitative analysis is a direct test of the theoretical hypothesis of larson and bromley 1990 larson b bromley d 1990 property rights externalities and resource degradation locating the tragedy journal of development economics 33 2 that common property and private property rights may lead to similar incentives for resource protection a household model is formulated and applied empirically with data from indonesia to test rates of forest biomass and soil quality degradation under private and common property rights results show that the two regimes may equal each other by including bequest value sensitivity analysis is conducted by changing model parameters

modelling land use deforestation and policy a hybrid optimisation heterogeneous agent model with application to the bolivian amazon abstract we introduce a hybrid simulation model simpachamama designed to explore the complex socio environmental trade offs of alternative policy bundles and policy sequencing options for stemming deforestation and reducing poverty in tropical countries designed and calibrated to the initial conditions of a small forest village in rural bolivia the model consists of a an optimising agricultural household module of heterogeneous agents that make individually optimal land use decisions based on factor endowments and market conditions b an encompassing general equilibrium shell module that endogenously determines wages and links the agricultural labour market and rural urban migration rates and c a novel user controlled policy maker module that allows the user to make real time choices over a variety of public and environmental policies that in turn impact land use welfare and migration over a 20 year simulation period the results highlight trade offs between reductions in deforestation and improvements in household welfare that can only be overcome either when international redd payments are offered or when decentralized deforestation taxes are implemented the sequencing of policies plays a critical role in the determination of these results

special section land use options in dry tropical woodland ecosystems in zimbabwe introduction overview and synthesis the articles included in this special section focus on the ecological and economic interactions of woodland use in western zimbabwe one of the aims was to investigate the use of modelling to achieve integration among disciplines the integrated model draws on the models in the different papers comprising the special section the model has five ecological sectors five sectors covering woodland use by local people and the state forestry organisation two sectors to cover agriculture one sector for population growth and land use a sector to cover carbon sequestration and a sector to calculate net present values of the various uses the state has usually attempted to keep people and their livestock out of the state forest we show that the private benefits of cropland may be greater than those related to state or local use of the woodland but further work is required to incorporate the public costs of subsidies to cropland and the public benefits of woodland services livestock production in the woodlands is compatible with woodland management both from economic and ecological perspectives expulsion of forest 1 dwellers from the state forest makes little ecological impact on the woodland and does not improve the economic value of the woodland to the state however if the forestry commission relaxes the current control on in migration it is likely that the woodland will be rapidly depleted in the face of massive in migration modelling is seen as a framework for integration of ecological and economic issues but further work is required to incorporate institutional perspectives from the sociological and anthropological disciplines 2000 elsevier science b v all rights reserved

agricultural expansion and deforestation modelling the impact of population market forces and property rights abstract this paper compares four different modelling approaches to agricultural expansion and deforestation and explores the implications of assumptions about the household objectives the labour market and the property rights regime a major distinction is made between population and market based explanations many of the popular policy prescriptions are based on the population approach assuming subsistence behaviour and limited market integration within a more realistic particularly for the long term effects market approach well intentioned policies such as agricultural intensification programmes may boost deforestation many forest frontier contexts are also characterized by forest clearing giving farmers land rights deforestation becomes an investment to the farmer and a title establishment strategy land titling and credit programmes may therefore increase deforestation

trade tropical deforestation and policy interventions trade interventions are increasingly advocated as a means for controlling timber related tropical deforestation this paper analyzes the impact on deforestation of such policy instruments in a dynamic framework the forest is modelled as a potentially renewable resource and timber is extracted for purposes of export and domestic consumption optimality conditions for a variety of model specifications are derived and the impacts of changes in the terms of trade and market structure on long run deforestation are analyzed the results of this analysis suggest that trade interventions that seek to affect the terms of trade against the export of tropical timber products are in the long run a second best policy option for influencing the deforestation process

impacts of carbon based policy instruments and taxes on tropical deforestation the impacts of carbon payments and income taxes on curbing tropical forest loss are analyzed under a market equilibrium framework the supply of cleared forest land was derived by using a two period utility maximization model when the carbon sequestration of a private forestholder is credited the land demand was derived from the profit maximization problem of a cash crop farmer the model was applied to data from the humid chaco eco region of paraguay the results indicate that taxes on cash crop and forestry incomes may in fact be ineffective in curbing forest loss carbon payments however would effectively reduce forest clearing in the context studied a carbon payment of 30 per ton of carbon would limit deforestation to 10 of existing forest cover a reversible carbon crediting system in which a forestholder can redeem a credited forest seems to substantially increase at least in the short run the effectiveness of carbon payments carbon payments could also complement the tax on cash crop income in curbing tropical forest loss an effective policy to combat tropical deforestation should therefore jointly consider forestry and cash crop sectors

environmental degradation in developing countries households and the reverse environmental kuznets curve abstract we propose an alternative explanation for the inverted u shape relationship between income and environmental degradation in developing countries production and consumption patterns of rural households are the main cause of environmental damage with a conventional household model we demonstrate that the so called environmental kuznets curve may arise when the restrictive assumption of a set of perfect markets for factors and commodities is relaxed depending on the criterion or indicator that is used to represent environmental pressure however we demonstrate that the reverse may also hold this finding highlights the importance of selecting the appropriate dependent variable in regression analyses

assessing the relative merits of development charges and transferable development rights in an uncertain world traditionally regulatory instruments have been used to achieve planning objectives however emerging market based policy instruments such as transferable development rights a quantity based app

rights to forest products deforestation and smallholder income evidence from the western brazilian amazon abstract the causes of tropical deforestation are many and complex but relative financial returns at the household level play a large role in determining which activities and investments are pursued a farm level bioeconomic model indicates that the best course for smallholders in the western brazilian amazon who seek to boost consumption levels over time is to convert forest to agriculture results of a simulated experiment show that permitting sustainable off take of timber products on farms would improve incomes and slow smallholder deforestation but use of cleared land would be little changed because such strong financial incentives exist to harvest timber unsustainably mechanisms for monitoring timber off take will be required the costs of establishing and maintaining them should be shared among all beneficiaries of the environmental services provided by forests

voting on income tax exemptions most itemized tax exemptions lead to significant deductions for a minority of the population only this raises the question why the majority does not vote for the abolition of these tax privileges in exchange for lower tax rates in this paper we show that a reform proposal may be voted down even when the majority uses the exemption at stake below the average turning to an empirical application we simulate the voting outcome on the proposal to abolish the tax deductibility of commuting expenses in germany our model predicts that this proposal would be rejected even though a comfortable majority has below average deductions

land inheritance and market transactions in uganda studies on the role of nonmarket land transactions remain limited this paper addresses two questions is land inheritance driven by underdeveloped land markets how does land inheritance influence land disposal and acquisition we use a switching regression model on household data from rural uganda we find that the initially landless or near landless households due to little or no land inheritance obtain land through land markets while those that are land rich dispose of land through land sales and bequests the results suggest that a process of land equalization is unfolding within the sample

assessing the relationship between government policy and deforestation abstract the effects of public policies on deforestation are assessed in a general equilibrium framework a forest can be left in its natural state to provide a consumption benefit such as biodiversity or carbon absorption in its natural state it is subject to free access however alternatively it can be converted to a market input needed to produce a valuable final product the utility of consumers depends on the amount of the forest left standing on consumption of the forest using commodity and on consumption of a numeraire that is produced from non forest inputs only final commodities are traded with the outside world at constant prices the model is used to evaluate claims in the literature regarding the effects of government policies on deforestation in developing countries the polices examined include transportation improvements taxes and royalties on timber harvests controls on log exports a variety of agricultural policies tax incentives to promote domestic processing industries and employment opportunity enhancement

the race for property rights economics literature on the evolution of property rights has increasingly emphasized the optimal timing for establishing those rights yoram barzel dale mortensen 2 and partha dasgupta and joseph stiglitz 3 for example have shown that competition among firms for the rents associated with innovative devices and ideas can lead to the dissipation of those rents in the process when property rights and the rents therefrom are up for grabs it is possible for expenditures to establish rights to fully dissipate the rents leaving the efficiency gains from privatization in question 4 before any conclusions about the welfare gains from establishing property rights can be reached attention must be paid to the evolutionary

demand side policies for environmental protection and sustainable usage of renewable resources abstract since many renewable resource systems such as tropical and temperate forests coral reefs and wild fisheries are often exploited at unsustainable rates studies aimed at reducing these trends have focused on the market failures associated with over exploitation within this framework the literature devised what we term supply side policies to correct these market failures here we introduce demand side policies into the mix of renewable resource and environmental management policies these policies are designed to increase the demand for goods produced in a sustainable fashion by 1 promoting the long term conservation of natural capital assets 2 promoting the attainment of economic efficiency and 3 providing greater political acceptability relative to supply side policies

environmental degradation and economic openness in ldcs the poverty linkage the connection between growth economic policies and the environment in developing countries has become a primary concern for economists and policy makers this is because of the fact that environmental degradation in the third world has accelerated dramatically over the last few decades deforestation biomass degradation and air emissions in developing countries are now a serious concern for the industrialized world the world ecological system has been able to tolerate well the almost total elimination of natural forests and biomass as well as the massive generation of air and water pollution by the developed countries but it is not clear that a duplication of this process in the developing world would not induce radical changes could imply significant costs in terms of human lives public health and other investments in the industrialized countries 18 refs

externalities in economies with imperfect information and incomplete markets this paper presents a simple general framework for analyzing externalities in economies with incomplete markets and imperfect infonnation by identifying the pecuniary effects of these externalities that net out the paper simplifies the problem of determining when tax interventions are pareto improving the approach indicates that such tax interventions almost always exist and that equilibria in situations of imperfect information are rarely constrained pareto optima it can also lead to simple tests based on readily observable indicators of the efficacy of particular tax policies in situations involving adverse selection signaling moral hazard incomplete contingent claims markets and queue rationing equilibria traditional discussions of externalities have emphasized the distinction between technological externalities in which the action of one individual or firm directly affects the utility or profit ofanother and pecuniary externalities in which one individual s or firm s actions affect another only through effects on prices while the presence of technological externalities imply in general that a competitive equilibrium may not be pareto efficient pecuniary externalities hy themselves are not a source of inefficiency the fact that prices change has of course important consequences there are both distributional and allocational effects but the distribution effects net out gains for example hy firms whose prices increase are precisely offset by losses e g to individuals who must pay higher prices and there are no welfare losses from the allocation effects as long as the price changes involved are small if firms are maximizing profits and individuals are maximizing utility both facing prices that correctly refiect opportunity costs then standard envelope theorem arguments imply that changes in profits or utility induced by changes in allocations resulting from any small change in prices are negligible

land use and income diversification comparing traditional and colonist populations in the brazilian amazon this article compares and analyzes land use and income diversification among two distinct groups of farmers in the brazilian amazon recent colonists in ouro preto do oeste rondonia and traditional long term residents along the tapajos river para we investigate the hypothesis that farmers who diversify their cash income sources clear less forest on an annual basis and we compare these livelihood choices across colonist and traditional populations in particular we develop a conceptual model based on the household production framework and use econometric models to identify determinants of diversification and forest clearing we find that diversification of agricultural cash crops is negatively correlated with forest clearing by colonists providing limited evidence for the hypothesis other significant covariates of diversification and forest clearing include cash income levels stage in family life cycle cattle ownership and chemical inputs differences in these variables and differences in household response to these variables explain variation in diversification and forest clearing across the two populations

dual economic growth in poor tropical areas abstract we consider a two sector model a modern sector and an extensive one with the extensive sector being highly dependent on natural vegetation cover as a factor of production in the extensive sector land tenure is not well defined we show that taxing the extensive sector as a whole and land intensive crops relative to labor intensive crops increases real income consumption in the short run however necessarily falls the cost of the adjustment is paid mostly by the poor when the extensive sector as a whole is taxed the distributional consequences of taxing the land intensive outputs however are ambiguous

economic parameters of deforestation recent debate about how timber prices affect deforestation has focused mainly on how log export bans imposed in many developing countries to protect domestic timber processing affect deforestation one side argues that the lower domestic timber prices that result from banning log exports increase deforestation by making forestry less profitable than competing land uses such as agriculture the other argues that lower timber prices reduce profits from logging so they slow down deforestation caused by logging the author argues that the conflicting views result from simplistic analysis that ignores differences between types of forest the two positions are reconciled by distinguishing between unmanaged forests for example biologically mature previously unlogged primary forests and managed forests such as forest plantations cultivated for periodic harvest this distinction allows the derivation of unambiguous comparative static results and is useful because many nontimber benefits from forests such as biodiversity conservation are associated mainly with unmanaged forests the distinction between managed and unmanaged forests leads to both unconventional and conventional results all things being equal a lower timber price results in larger areas of unmanaged forests and smaller areas of managed forests that is measures that reduce the producer price for timber for example import restrictions in timber consuming countries and export restrictions in timber producing countries are suitable as a second best policy to reduce the pressure on unmanaged forest frontiers most logging in tropical forests occurs in unmanaged forests so the claim that trade restrictions such as log export bans increase deforestation is inconsistent with profit maximizing land use a fee on land used for logging is preferable to a tax on timber output which is far more common but encourages logging waste technological interventions that increase the intensity of forestry or alternative land uses are an ambiguous instrument for the conservation of unmanaged forests if demand elasticity for outputs is high an intervention that increases the intensity of agriculture logging or other land uses increases incentive for conversion of unmanaged forests the building of roads is particularly harmful to the conservation of unmanaged forests as it increases incentives for logging and subsequent alternative land uses proper pricing of forest lands would increase land prices and lead to market driven intensification accompanied by forest protection such pricing policies would be preferable to a technological intervention that increases land use intensity with ambiguous outcomes for forest protection if unmanaged forest is converted to agriculture the effect of lowering the decisionmaker s discount rate depends on the size of timber rents from logging unmanaged forests if the standing timber has high commercial value a lower discount rate would slow conversion of unmanaged forests if the standing timber has no commercial value logging is an investment for obtaining future benefits of alternate land use a lower discount rate would stimulate this investment and increase the conversion of unmanaged forests also if unmanaged forests are converted to managed forests a lower discount rate can increase conversion since profits from managed forestry are higher with a lower discount rate

on the public choice critique of welfare economics the public choice literature urges the welfare economist to anticipate how political forces will shape the levels of new policy instruments when government intervenes in a new way this paper argues that the welfare economist should also recognize that new interventions may impact the politically determined levels of existing policy instruments it shows how the introduction of a new instrument can lead to shifts in political coalitions or compromises in existing areas of conflict that can produce significant changes in existing policies such spillover effects can provide new arguments for introducing particular policy interventions even a policy instrument without an obvious welfare economic rationale can change voter coalitions and shift the policy equilibrium in a welfare improving direction

social insurance majority voting and labor mobility abstract this paper presents a political economy approach to payroll tax competition between two countries choosing their respective systems of social insurance in a context of labor mobility it considers a class of social insurance systems which includes two interesting polar cases one where benefits are linked to contributions bismarck and one where benefits are flat beveridge the type of social insurance is chosen behind the veil of ignorance at a first constitutional stage in the second stage the generosity of social insurance as measured by the payroll tax rate is chosen by the majority given that some have the possibility to move the main results are as follows first the type of mobility namely poor vs rich has a significant impact on the second stage tax competition migration equilibrium second more bismarckian systems are not necessarily more tax competition proof third the process will result in social insurance systems with a stronger than optimal link between earnings and benefits put differently at the constitutional stage the countries will tend to adopt systems which are too bismarckian

strategies to increase agricultural productivity and reduce land degradation evidence from uganda this paper estimates a structural econometric model of household decisions regarding income strategies participation in programs and organisations crop choices land management and labour use and their implications for agricultural production and soil erosion based upon a survey of over 450 households and their farm plots in uganda many factors have context specific impacts and involve trade offs between increasing production and reducing land degradation government agricultural extension and training programs contribute to higher value of crop production in the lowlands but to soil erosion in the highlands by contrast non governmental organization ngo programs focusing on agriculture and environment help to reduce erosion but have less favourable impacts on production in the lowlands education increases household incomes but also reduces crop production in the lowlands poverty has mixed impacts on agricultural production depending on the nature of poverty smaller farms obtain higher crop production per hectare while households with fewer livestock have lower crop production population pressure contributes to agricultural intensification but also to erosion in the densely populated highlands several household income strategies contribute to increased value of crop production without significant impacts on soil erosion we find little evidence of impact of access to markets roads and credit land tenure or title on agricultural intensification and crop production and land degradation in general the results imply that the strategies to increase agricultural production and reduce land degradation must be location specific and that there are few win win opportunities to simultaneously increase production and reduce land degradation

does poverty constrain deforestation econometric evidence from peru this paper examines the relationship between income and land clearing for households living in tropical forest regions a simple model of the agricultural household that clears land for agriculture is developed to investigate the relationship between lagged income and cleared land holdings analysis of panel data from peru suggests that lagged income is positively correlated with clearing though at a decreasing rate and because of labor market constraints clearing is positively correlated with household labor availability this work suggests that small increases in the incomes of the poorest are unlikely to reduce deforestation in this context

special section land use options in dry tropical woodland ecosystem in zimbabwe household resource allocations in response to risks and returns in a communal area of western zimbabwe abstract a household production model is constructed in the context of a subsistence economy influenced by fluctuating rainfall increasing populations and relationships to the natural resource base households are modelled as attempting to optimally allocate their resources among four sectors agriculture woodlands with wood and non wood sub sectors livestock and urban simulations show that although welfare decreases over the 50 year simulation period the resource base appears to be able to sustain the increased pressure data to feed the model are limited implying further research is needed on resources expended by households by sector perceptions of risk and differentiation within and among households according to gender and wealth despite data limitations results show the importance of considering that households may allocate resources between multiple sectors as these options may buffer their welfare from rainfall shocks and increasing population pressures

on the gains of committing to inefficient production lobbying and low land productivity in latin america abstract we present a new explanation and empirical evidence showing that rural subsidies to large farmers tend to be associated with low land productivity and excessive deforestation we develop a lobbying model where wealthy farmers trade bribes or political contributions to government politicians in exchange for subsidies farmers are able to tilt the terms of the bargaining game with policy makers in their favor by pre committing to an inefficient choice of semi fixed inputs government proneness to accept political contributions or bribes and its willingness to provide subsidies cause farmers to adopt inefficient modes of production as a mechanism to capture such subsidies our predictions are consistent with stylized facts on land use in latin america and suggest that subsidy schemes have been counterproductive distorting and constraining development and triggering excessive depletion of natural resources we validate some of the predictions of the model through econometric analyses using a new data set for nine countries in latin america

forest dependence and participation in cpr management empirical evidence from forest co management in malawi abstract we develop an endogenous sample selection model to investigate how forest dependence influences a household s decision to participate in forest co management program using data from chimaliro and liwonde forest reserves in malawi we find that where forests primarily have a gap filling or safety net role in chimaliro high forest dependency induces higher rates of participation however with more commercial forest uses and a more heterogeneous social context as in liwonde high forest dependency reduces the incentives for participation the findings point to the need to design parallel interventions alongside the forest co management program in order to provide supplementary income sources to participants and increase the incentives for participation

energy consumption in rural china a household model for three villages in jiangxi province abstract in china fuelwood and coal are the most important energy sources for rural households in poor areas along with population and economic growth excessive fuelwood collection is a major cause of deforestation burning coal contributes to environmental problems such as air pollution acid rain and greenhouse gas emissions the purpose of this article is to analyze factors determining choice of energy source and labor input into fuelwood collection in poor forest rich regions and to provide policy recommendations on ways to affect these choices to this end a nonseparable household model reflecting choices in labor allocation and energy demand of rural households is estimated from available data for three villages in a poor forest rich region in jiangxi province southeast china innovative aspects of this article are the analyses of factors driving household substitution between forest and non forest fuels and of dissimilarities in household responses under different market access conditions

land tenure differences and investment in land improvement measures theoretical and empirical analyses this article develops a theoretical framework to examine the relationship between land tenure arrangements and households investment in soil improving and conservation measures it then analyzes this relationship with a multivariate probit model based on detailed plot level data from villages in the brong ahafo region of ghana a major hypothesis tested is that investment in productivity enhancing and conservation techniques are influenced by land tenure arrangements the theoretical analysis and empirical results generally reveal that land tenure differences significantly influence farmers decisions to invest in land improving and conservation measures the findings also show that tenure security does affect farm productivity

electoral competition and special interest politics have fixed positions on some issues but vary their positions on others in order to attract votes and campaign contributions in this context we examine whether special interest groups are governed by an electoral motive or an influence in their campaign giving and how their contributions affect the equilibrium platforms we show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups the party that is expected to win a majority of seats caters more to the special interests

majority rule and the public provision of a private good this paper extends the literature on the socialization of commodities by developing a model of voting over the public provision of a private good health care

deprived land use intensification in shifting cultivation the population pressure hypothesis revisited this article provides a theoretical framework based on optimal control theory to analyze farm households land use intensification decisions in forest based shifting cultivation slash and burn agroecosystems the main results from the analysis generally coincide with the population pressure hypothesis pph as an important driver of soil degradation due to the so called fallow crisis or deprived land use intensification in shifting cultivation however the model also shows from a supply perspective that such a vicious circle of lower yields and greater forest land clearing may be avoided when the production elasticity of on farm labor outweighs the elasticity of substitution between farm labor and soil fertility furthermore using data from shifting cultivating households from yucatan mexico we calibrate the effect of changes in population density the numerical analysis suggests that by contrast to better off households when population density increases poorer shifting cultivating households optimal labor allocation strategy is to further extensify land use by clearing more forest in the village common property land or ejido land

public provision of private goods government may provide a good that can if legally permitted be supplemented by private purchases policy is determined by majority rule under standard assumptions on preferences a majority voting equilibrium exists a regime of positive government provision with no restriction on private supplements is shown to be majority preferred to a regime of either only market provision or only government provision combined public and private expenditure on the good is higher under this dual provision regime than under either of the alternatives under some preference configurations the median income voter is pivotal under others a voter with income below the median is pivotal

extensification of agriculture and deforestation empirical evidence from sudan extensification of agriculture is one of the major factors contributing to the destruction of forests in africa in sudan such horizontal expansion comes at the expense of land devoted to trees and other vegetation thereby inducing conditions that are inimical to sustainable agricultural production different factors have contributed to extensification although high economic returns from crop mainly sorghum production was an important factor encouraging extensification of rainfed mechanized farming other factors outside agriculture have also contributed to that expansion this paper uses data from eastern sudan and an acreage response model to identify the most important factors influencing acreage expansion different measures and forms of risk were used in the acreage response model the paper shows how policies in the energy sector can indirectly influence acreage expansion in the agricultural sector

voluntary public health insurance we look at the consequences of allowing public health insurance puhi to be voluntary when its coverage can be supplemented in the market puhi redistributes with respect to risk and income and the market is affected by adverse selection we argue that making puhi voluntary does not lead to its collapse since individuals always participate in it additionally in some cases a voluntary puhi scheme increases market efficiency because participation in it sends a signal to private insurers of an individual s health risk type the welfare consequences depend on the status quo if in the status quo no political support exists for a compulsory puhi making it voluntary constitutes a pareto improvement and in some cases all individuals are strictly better off if instead the status quo implements compulsory puhi making it voluntary then results in less redistribution

private storage of common property abstract many resources extracted under the rule of capture are not utilized immediately but are stored instead for later use oil is stockpiled fish are frozen groundwater is bottled rivers are dammed land deforested as the way to establish title remains uncultivated we examine the positive and normative effects of such storage privatization of common property through storage may eliminate inefficiencies altogether but the accelerated extraction it induces may also exacerbate them even if rapid extraction does not reduce ultimate recovery once storage commences extraction accelerates until the open access reserves are drained in limiting cases these speculative acquisitions are instantaneous the naturally occurring analogue of policy induced speculative attacks studied in the international finance literature when some reserves are privately owned while others are open access the order of extraction no longer follows the progression from lowest to highest per unit cost first noted by o c herfindahl in extractive resources and taxation m gaffney ed univ of wisconsin press madism 1997 instead the common property may be extracted in its entirety before any private reserves are extracted even if it has the higher per unit extraction cost

a model of shifting cultivation can soil conservation reduce deforestation shifting cultivators manage soil not only by adjusting soil use on already cleared lands as in continuous cultivation but also by clearing forests to obtain new fertile soils this study examines the crucial link between on farm soil conservation and deforestation in shifting cultivation by modeling forest clearing as an investment in soil for a private farmer more generally by doing so the study attempts to integrate deforestation and soil conservation models which have been separately developed in the literature our policy goal is to arrest tropical deforestation as destruction of global commons caused by land degradation in shifting cultivation while improving the well being of poor shifting cultivators our integrated approach enables joint policy analyses of deforestation and land degradation three welfare enhancing policies are considered the first is agricultural and nonagricultural subsidies affecting farm and nonfarm income opportunities the second is fiscal and tenure policies affecting discount rates our question is whether the link between forest clearing and soil fertility alters the outcomes of these two standard macroeconomic policies commonly found in the literature the third policy or program is various soil conservation measures affecting soil regeneration and erosivity on already cleared lands this article examines a very important question which has received little attention in previous theoretical works can soil conservation reduce deforestation this study confirms anti deforestation effects of the promotion of nonfarming activities a common and often emphasized finding in previous works among shifting cultivators more importantly it also demonstrates that improving various soil conservation measures not only discourages forest clearing among shifting cultivators but also tends to have greater effects on forest protection than promoting nonfarming activities contrarily agricultural price subsidy or technological progress gives rise to the opposite outcome and lowering the farmer s discount rate or improving tenure security encourages him her to clear more forests just to accumulate soil

natural resource management and economywide policies in costa rica a computable general equilibrium cge modeling approach a computable general equilibrium cge model is used to trace the effects of government policies on costa rican forests in the presence of incomplete markets the results indicate that correcting the market failure would as expected reduce deforestation more interestingly in the presence of the market failure lowering the tax on unskilled labor reduces deforestation because people gain employment in other parts of the economy taxation of other produced goods changes the incentives for deforestation for example a tax on agricultural products elevates the relative price of capital and shifts resources away from the capital intensive industrial sector toward the agricultural and forest sectors as a result such a tax increases deforestation

education finance reform and investment in human capital lessons from california abstract this paper examines the effect of different education financing systems on the level and distribution of resources devoted to public education we focus on california which in the 1970 s was transformed from a foundation system of mixed local and state financing to one of effectively pure state finance and subsequently saw its funding of public education fall between 10 and 15 relative to the rest of the us we show that a simple political economy model of public finance can account for the bulk of this drop we find that while the distribution of spending became more equal this was mainly at the cost of a large reduction in spending in the wealthier communities with little increase for the poorer districts our calibrated model implies that there is no simple trade off between equity and resources we show that if california had moved to the opposite extreme and abolished state aid altogether funding for public education would also have dropped by almost 10

a model of political competition with citizen candidates the authors develop a model of electoral competition in which citizens choose whether or not to run as candidates a winner implements her favorite policy the equilibrium number of candidates depends negatively on the cost of running and positively on the benefits of winning for some parameter values all equilibria under plurality rule have exactly two candidates whose positions are distinct two candidate elections are more likely under plurality rule than under a runoff system the candidates positions are less differentiated under a runoff system there exist equilibria under both systems in which some candidates have no chance of winning

electoral competition with informed and uninformed voters i present a model of electoral competition in which candidates raise campaign contributions by choosing policies that benefit interest groups and then expend those contributions to influence voters who are uninformed about the policies informed voters however vote based on those policies so candidates face a trade off between choosing a policy to generate funds to attract the uninformed vote and choosing a policy to attract the informed vote electoral equilibria are characterized for two categories of policies particularistic and collective in the case of particularistic policies the equilibrium policies of the candidates are separated if the proportion of uninformed voters is sufficiently high and the degree of separation is an increasing function of that proportion the model is extended to include the public financing of elections and incumbency advantages for the case of collective policies the candidates locate at the median of the ideal points of the informed voters and contributions are zero

foreign aid capital accumulation and developing country resource extraction abstract we consider a developing country with a two period horizon which possesses a natural resource that can be extracted with or without extraction costs a donor can affect extraction through aid which is either unconditional or conditional on resource extraction and has a preference for extraction to be postponed indefinitely or at least until period 2 we show that shifting unconditional aid from period 2 to period 1 can lead to postponement of extraction to period 2 given that the country chooses an internal solution with respect to extraction and faces a binding resource constraint over the two periods aid conditional on resource saving in period 1 can however have greater effects and be effective also when the country initially extracts all of the resource in period 1 or does not face a resource constraint we also discuss the effects of capital accumulation and donor investment subsidies on the extraction profile these are shown to be largely negative in our model by promoting early extraction