challenges to proponents of common property recource systems despairing voices from the social forests of zimbabwe abstract there is a fair degree of misplaced optimism about common property resource cpr management in investigating common property issues for woodlands in communal areas in zimbabwe we are struck by the numerous case studies showing a breakdown of local institutions for cpr management and the lack of any emerging alternative institutions for such management there are a number of contributing economic social and ecological factors to this phenomenon we argue that the formal rule based systems that form the cornerstones of the proposed cpr systems are far removed from the current institutional systems rooted in norm based controls we suggest that advocacy of cpr systems has to be tempered with critical analysis

the ambiguous impact of inequality on local resource management abstract the impact of inequality on the ability of human groups to undertake successful collective action is investigated with special reference to overexploitation of common property resources in voluntary provision problems on the one hand inequality has an ambiguous impact on the feasibility of the efficient outcome even though better endowed agents contribute more to collective action in regulated settings on the other hand inequality tends to reduce the acceptability of available regulatory schemes and therefore to make collective action more difficult

the tragedy of the commons in cote d ivoire agriculture empirical evidence and implications for evaluating trade policies expansion of cultivated land diminishes the extent of forestlands or reduces the length of fallow periods and hence reduces the amount of natural vegetation the increase in land under cultivation has a direct output increasing effect at the cost of reducing natural capital and agricultural productivity the evidence for western cote d ivoire is consistent with and provides an explanation for the declining agricultural productivity observed in sub saharan africa during the past few decades this article uses a theoretical model to determine the level of land cultivation that maximizes village income using data from cote d ivoire for 1985 87 an important part of the land is under common property usually at the village level the results show that farmers do not internalize even a small fraction of the external cost of biomass in their land allocation decisions the lack of internalization of the social cost of the biomass resource leads to large income losses at the village level as much as 14 percent of village income these losses are many times larger than the usual estimates for conventional distortions

coordination problems in local level resource management starting from the observation of important returns to scale effects in conservation of common property resources we identify some of the factors that impinge upon the chances of success of a decentralized group based management of local natural resources particular attention is paid to the influence of asset inequality among resource users in particular it is shown that by redistributing incentives among landowners land reform has an ambiguous impact on the latter s willingness to undertake conservation investments

an optimal path to extinction poverty and resource degradation in the open agrarian economy this paper constructs a model of the open agrarian economy in order to explore the tendency of many such economies to evolve along paths characterised by severe environmental degradation it pays special attention to the importance of commodity prices and the transfer system in determining agricultural activity levels in ecologically delicate systems

human capital versus sorting the effects of compulsory attendance laws under the educational sorting hypothesis a state compulsory school attendance law will increase the educational attainment of high ability workers who are not directly affected hy the law under the human capital hypothesis such laws affect only those individuals whose hehavior is directly constrained we find that compulsory attendance laws do increase enrollment rates in age groups they do not affect directly thus our results contradict the human capital hypothesis and are consistent with the sorting hypothesis i introduction the last decade has seen considerable debate between supporters of the human capital and sorting models of education the former assert that the effect of education on wages reflects increased productivity the latter maintain that it reflects at least in part correlation between education and unobserved ability workers use education to signal their ability while employers use education to screen workers despite the importance of the debate no fully convincing tests of the hypotheses have been developed in fact many members of the profession maintain at least privately that these hypotheses cannot be tested against each other and that the debate must therefore be relegated to the realm of ideology in this paper we show that the models can be tested against each other by examining the effects of state compulsory school attendance laws we show that under the human capital hypotheis such laws will affect the educational attainment only of those who in the absence of the law would have left school prior to the minimum school leaving age on the other hand under the sorting hypothesis the effects of the law will percolate through the system increasing educational attainment even among workers not directly constrained by the law our results are consistent with the predictions of the sorting model

common property institutions and sustainable governance of resources abstract the literature on common property based resource management comprises many important studies that seek to specify the conditions under which groups of users will self organize and sustainably govern resources upon which they depend using three of the more comprehensive such studies and with an extensive review of writings on the commons this paper demonstrates that the enterprise of generating lists of conditions under which commons are governed sustainably is a flawed and impossibly costly research task for a way out the paper examines the relative merits of statistical comparative and case study approaches to studying the commons it ends with a plea for careful research design and sample selection construction of causal mechanisms and a shift toward comparative and statistical rather than single case analyses such steps are necessary for a coherent empirically relevant theory of the commons

state and peasant in contemporary china the political economy of village government this is a study of peasant state relations and village politics as they have evolved in response to the state s attempts to control the division of the harvest and extract the state defined surplus to provide the reader with a clearer sense of the evolution of peasant state relations over almost a forty year period and to highlight the dramatic changes that have taken place since 1978 1 have divided my analysis into two parts chapters 2 through 7 are on maoist china and chapters 8 and 9 are on post mao china the first part examines the state s grain policies and patterns of local politics that emerged during the highly collectivized maoist period when the state closed free grain markets and established the system of unified purchase and sales tonggou tongxiao the second part describes the new methods for the production and division of the harvest after 1978 when the government decollectivized agriculture and abolished its unified procurement program

the externalities associated with the common property exploitation of groundwater abstract in this paper the rate of groundwater extraction under the common property arrangement is the outcome of a dynamic game played with feedback strategies the analysis clarifies the externalities associated with the common property extraction of groundwater and identifies an risk externality that arises when firms are risk averse identifying the various externalities bears on the development of appropriate forms of groundwater management in particular the risk externality would be unknown to the watermaster of a central control agency suggesting the need for creative decentralized forms of groundwater management

optimal management of a confined groundwater system abstract dynamic programming is applied to a relatively simple economic and hydrologic model of a confined aquifer system in southwest montana to determine an optimal interseasonal allocation schedule the derived decision rule demonstrates the economic advantage of maintaining a confined groundwater system while localized intraseasonal loss of the artesian pressure may occur it is important to maintain this pressure from year to year because of its role in reducing extraction costs the welfare gap as measured by differences in the net present value of economic returns to the basin under an optimal use policy versus an uncontrolled common pool situation is not trivial sensitivity analysis indicates that assumptions about uniformity of land productivity vis a vis their impact on the shape of the returns function the discount rate and the level of electric power rates are particularly critical with respect to the magnitude of the commonality problem

benefits from groundwater management magnitude sensitivity and distribution empirical estimates of benefits from groundwater management are reported for an area in california with heavy reliance on groundwater supplies benefits are quite sensitive to the water demand schedule and interest rate but less sensitive to other parameters however in all cases considered the increases in welfare from groundwater management are less than ten percent tax revenues received under a system of pump taxes are four to five times as large as the benefits from management thus groundwater users gain under a system of quotas but may suffer substantial welfare losses under pump taxes

property rights labour markets and efficiency in a transition economy the case of rural china we investigate the consequences of imperfect factor market development for farm efficiency in north china we estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative as opposed to market allocation of land combined with unevenly developed off farm opportunities using a new household survey we find considerable inefficiency in the use of labour this inefficiency is alleviated by external labour markets and to a limited degree by administrative reallocations the reallocations do not go far enough however which raises important questions about con straints on rental activity and property rights formation more generally jel classification q15 012

prices vs quantities the political perspective regulation regimes subject to the influence of interest groups are compared it is shown that the allocation of the regulated commodity varies with the implemented control and that the advantage of prices vs quotas increases with the elasticity of the demand for or the supply of the commodity and decreases with the number of organized producers in the regulated industry control regimes can be ranked for negative but not positive externalities finally a control regime leading to a more efficient commodity allocation also entails using fewer resources in rent seeking activities

groundwater use under incomplete information abstract this paper introduces a game theoretic model of groundwater extraction in a two cell aquifer under incomplete information a novel assumption is that individual users have incomplete knowledge of the speed of lateral flows in the aquifer although a user is aware that his neighbor s water use has some influence on his future water stock he is uncertain about the degree of this impact we find that the lack of information may either increase or decrease the rate of water use and welfare in a two period framework the relevant characteristic is the ratio of the periodic marginal benefits of water use depending on whether this ratio is convex or concave the average speed with which the aquifer is depleted decreases or increases when users learn more about the local hydrologic properties of groundwater in principle welfare may decrease even in cases when the groundwater allocation is closer to the efficient groundwater allocation

the effects of well management and the nature of the aquifer on groundwater resources we compare groundwater use under collective well management in china where village leaders allocate water among households and under private well management where farmers either pump from their own wells or buy water from wells owned by other farmers villages are divided into connected or isolated groups depending on whether there are lateral groundwater flows between aquifers underlying a village and neighboring ones in rural china households under collective well management use less water even under collective management households located in connected villages use more water indicating that the connectedness of the aquifers may undermine leaders incentives to conserve water

competitive versus efficient extraction of a common property resource the groundwater case abstract in this paper socially optimal and private extraction of a common property aquifer are compared open loop equilibrium and feedback equilibrium in linear strategies have been computed to characterize private extraction the use of these two equilibrium concepts allows us to distinguish between cost and strategic externalities as long as the open loop solution captures only the cost externality and the feedback solution captures both the results show that strategic behaviour increases the overexploitation of the aquifer compared to the open loop solution however if the groundwater storage capacity is large the difference between the socially optimal and private extraction the latter characterized by a feedback equilibrium is negligible

prices versus quantities with incomplete enforcement abstract i study whether incomplete enforcement of a regulation has any impact on the choice between price e g taxes and quantity e g tradeable quotas instruments results indicate that a second best design accounting for incomplete enforcement can be implemented equally well with either instrument as long as the benefit and cost curves are known with certainty if these curves are uncertain to the regulator however the quantity instrument performs relatively better than the price instrument the reason is that the effective amount of control under the quantity instrument is no longer fixed which makes this instrument come closer to a non linear instrument

the role of common pool problems in irrigation inefficiency a case study in groundwater pumping in mexico groundwater depletion is a serious problem in mexico several policy alternatives are currently being considered in order to improve the efficiency of irrigation water use so that extraction of groundwater is diminished an understanding and quantification of different sources of inefficiency in groundwater extraction is critical for policy design survey data from a geographically extensive sample of irrigators is used to gauge the importance of common pool problems on input specific irrigation inefficiency results show that mechanisms of electricity cost sharing implemented in many wells have a sizable impact on inefficiency of irrigation application moreover irrigation is very inelastic to its own unitary cost therefore results suggest that policies aimed at eliminating electricity cost sharing mechanisms would be significantly more effective than electricity price based policies in reducing irrigation application results also show that well sharing does not affect groundwater pumping significantly suggesting either a limited effect of individual pumping on water level or absence of strategic pumping by farmers sharing the wells

economic incentives and conservation crowding in social norms in a groundwater commons abstract price based interventions can be corrective where users extract from a common resource but may also impact existing social norms often crowding them out in contrast i find a pumping fee implemented by a group of irrigators in southern colorado effectively crowds in pro conservation norms enhancing the financial incentive s impact using a unique spatially oriented panel data set of groundwater wells i separate the direct role of increased pumping costs from the indirect effect transmitted through altered conservation norms to quantify conservation behavior i estimate how pumping at one well responds to pumping at nearby wells using instrumental variables to address simultaneity bias and interact that behavior with a difference in difference framework to assess the influence of the intervention in the preferred specification the fee directly accounts for approximately 74 of the reduced pumping and the remaining 26 comes from crowding in conservation norms

does education raise productivity or just reflect it education has an important effect on wages but it not clear whether this is because education raises productivity or because education is simply a signal of ability we implement a number of existing tests for discriminating between these two explanations and find that they do not support the signalling hypothesis however we have severe reservations about these results and we propose an alternative test based on changes in education incentives caused by changes in the minimum school leaving age in the 1970s using this idea we find that uk data appear to strongly support the human capital explanation an important issue in the economics of education is that an individual s education has an effect on wages paid in the labour market for example blundell et al 2003 uses detailed education and subsequent earnings information for a cohort of male individuals born in 1958 to estimate that the returns to a uk degree typically of 3 year duration relative to graduating from high school at 18 with 2 a level qualifications a necessary but not sufficient condition for admission to university is a 24 wage premium human capital explanations pioneered by becker 1962 and schultz 1963 suggest that the correlation between education and wages is due to education enhancing productivity however earnings may rise in response to education not because of any effect on productivity but simply because education may act as a signal of productivity employers believing that education is correlated with productivity will screen workers for their education and pay higher wages to the more educated the employers beliefs will be confirmed by their experience if it is the case that high productivity individuals signal this by choosing high levels of education it will be optimal for individuals to behave in this way if the cost of acquiring education is less for high productivity individuals than it is for low productivity individuals thus under reasonable conditions the market will be characterised by a separating equilibrium where higher productivity individuals choose higher levels of education than lower productivity workers and earn correspondingly higher wages the theory is largely due to spence 1973 1979 and the subsequent empirical literature was reviewed by groot and oosterbeek 1994 riley 2001 provides an excellent modern survey chevalier harmon and walker are fellows of iza in bonn and are affiliated with the institute for the study of social change issc in dublin this paper is part of the issc policy evaluation programme chevalier and walker are also affiliated with the centre for the economics of education at the london school of economics lse the support of all of these bodies for facilitating our collaboration is acknowledged harmon is grateful to university college london for their hospitality during his nuffield foundation new career development fellowship in the social sciences comments from steve machin and three anonymous referees greatly improved the exposition of this paper we are also grateful to richard blundell and to seminar participants at the lse and the tinbergen institute in amsterdam for their comments and to vincent o sullivan for excellent research assistance the usual disclaimer applies

what should government do problems of social cost externalities and all that public choice as a field introduced the framework for a methodical economic analysis of political markets the output of these markets of course is reflected by the role that government plays that is specifically true with respect to the organization of economic activity gordon tullock has studied a myriad of aspects of this topic for more than half a century we examine his answers to the question of what should government do and how they have influenced and are still impacting the discussion on the proper role of government in the economy

strategic behavior and efficiency in the common property extraction of groundwater groundwater has always been regarded as a common property resource where entry is restricted by land ownership and private exploitation is inefficient in 1980 gisser and sanchez presented a first estimation of this inefficiency cornparing socially optimal exploitation with private competitive exploitation using a model with linear water demand average extraction cost independent of the rate of extraction and linearly decreasing with respect to the water table level they characterized the private exploitation of the aquifer assuming that farmers are myopic and choose their rate of extraction to maximize their current profits whereas optimal exploitation is obtained by maximizing the present value of the stream of aggregate profits their results show that if the storage capacity of the aquifer is relatively large the difference between the two systems is so small that it can be ignored for practical consideration this result has been called the gisser sanchez rule by nieswiadomy 1985 and it has and important policy implication regulation of the resource does not seem justified since the profits it brings are not very high 1

the screening hypothesis an application of the wiles test according to wiles 1974 the screening and human capital theories of the return to education may be discriminated between by determining whether qualified individuals earn more by working in areas where their skills are relevant than they earn in other areas failure to do so is presumed to constitute evidence against human capital theory this paper applies the wiles test to a census of recent economics and science graduates from australian universities only for male science graduates is any evidence found in favour of human capital theory

pareto improving water management over space and time the honolulu case we model welfare gains from efficient allocation of groundwater over space and time relative to the status quo policy of financial cost recovery in order to promote political feasibility an intertemporal compensation plan is devised that renders the reform pareto improving gainers from the reform finance the compensation in proportion to their benefits through a block pricing scheme for the honolulu case only 7 of the 441 million in gains to winners is needed to compensate losers from the reform future winners from the reform also repay the deficit created by the compensation package much as state and local governments finance capital improvements copyright 2009 oxford university press