The Use of Economic Incentives in Developing Countries: Lessons from International Experience with Industrial Air Pollution

To what extent should developing countries eschew conventional command and control environmental regulation that is increasingly seen as inefficient and rely instead on economic incentives? This paper addresses this question as it pertains to industrial air pollution. The paper discusses the advantages and disadvantages of various economic incentive instruments, presents in-depth case studies of their application in Sweden, the United States, China, and Poland, and proposes a number of policy guidelines. The authors argue that both design deficiencies and pervasive constraints on monitoring and enforcement impede the effectiveness of economic instruments in developing countries. The latter are difficult to rectify, at least in the medium term. As a result, tradable permits are generally not practical. Suitably modified however, emissions fee policies probably are appropriate. They can provide a foundation for a transition to an effective economic incentive system, and can raise much needed revenue for environmental projects and programs. In addition, if political opposition can be overcome, environmental taxes constitute a second-best but potentially effective pollution control instrument.

Ownership Structure, Board Composition and Investment Performance

In this paper the relation between ownership structure, board composition and firm performance is explored. A panel of Swedish listed firms is used to investigate how board composition affects firm performance. Board heterogeneity is measured as board size, age and gender diversity. The results show that Swedish board of directors have become more diversified in terms of gender. Also, fewer firms have the CEO on the board which can be interpreted as a sign of increased independency. The regression analysis shows that gender diversity has a small but negative effect on investment performance, and the same holds for CEO being on the board. The analysis also show that board size has a significant negative effect on investment performance. When incorporating all the explanatory variables into one equation however, the negative effect of larger boards dilutes the effect of gender diversity and having the CEO on the board.Corporate governance; board composition; investments performance; marginal q

Integrated financial supervision : lessons of Northern European experience

Drawing on Northern European experience - where three Scandinavian countries have practiced integrated supervision for the past 10 years - the authors address three policy-related issues associated with the integrated model: a) Under what conditions should (or should not) a country consider moving toward an integrated model of financial supervision? Clearly, for a small transition or developing economy, or an economy with a small financial sector, the economies of scale from establishing an integrated agency outweigh the costs of moving to such a model. A strong case can also be made for an integrated approach in a financial sector dominated by banks, with little role for capital markets or a highly integrated financial sector. b) How should an integrated agency be structured, organized, and managed? There is no single obviously correct organizational structure, and existing agencies are experimenting with a variety of forms. An institutionally based structure has the virtue of simplicity and can be implemented fairly quickly, but tends to preserve the cultures and identities of the predecessor agencies more than is optimal. Whatever the structure, integrated supervision requires active management to secure the potential benefits that the approach offers. C) How should the integration process be implemented? While the decision to move to an integrated agency must be carefully thought through in the context of the country concerned, the more difficult part is implementation, which must be sensitively managed. Once the decision has been made, implementation should take place as quickly as possible. A well-conceived"change management"process should aim to overcome the cultural barriers associated with the previous fragmented structure. The authors'review of Northern European experience with integration of financial supervision raises a range of questions relevant to developing and transition economies, which they discuss.Financial Intermediation,Banks&Banking Reform,Insurance&Risk Mitigation,Environmental Economics&Policies,National Governance

Labor market programs, the discouraged-worker effect, and labor force participation

This paper estimates the macroeconomic effect of labor market programs on labor force participation. Labor market programs could counteract business-cycle variation in the participation rate that is due to the discouraged-worker effect, and they could prevent labor force outflow. An equation that determines the participation rate is estimated with GMM, using panel data (1986-1998) for Sweden's municipalities. The results indicate that labor market programs have relatively large and positive effects on labor force participation. If the number of participants in labor market programs increases temporarily by 100, the labor force increases immediately by around 63 persons. The effect is temporary so the number of participants in the labor force returns to the old level in the next period. If the number of participants in programs is permanently increased, the labor force increases by about 70 persons in the long run. Programs are reducing the business-cycle variation in labor force participation because the effect is positive and programs are counter-cyclical and they counteract the discouraged-worker effect in the long run. The results indicate that programs could prevent labor force outflow; participants who would have left labor force in the abscence of programs are may now be participating because of the programs. Wages and vacancies have positive long- and short-run effects on participation rate. Open unemployment, the job destruction rate, and proportions of persons between ages 18-24 and 55-65 have negative long run effects on the participation rate.Labor supply; labor market programs; dynamic panel data

The financial effects of climate change

Sweden's agriculture has historically been a cornerstone of Sweden's economy. By providing food security, rural employment and economic stability. Lantmännen was established in 1889. The cooperative is owned by approximately 18 000 farmers and functions as an organization encompassing sectors such as agriculture, food production, machinery and bioenergy. This organization has favorably contributed to the development of Swedish agriculture. However, in recent years, the agricultural production in Sweden has been affected by the intensified climate changes. The Swedish Meteorological and Hydrological Institute presents extreme and unpredictable weather due to Climate changes. These periods were significantly observed in agricultural production during the years 2018 and 2023. The drought in 2018 led to a lower harvest in quantity, whilst the drought followed by heavy precipitation 2023 led to a lower quality and quantity of the harvest. These trends are observed within the EU, and consequently, the Common agricultural Policy, as well as new directives are being formed to combat these new challenges. This research aims to contribute to an understanding of various sets of policy frameworks within the EU that are communicated to the Swedish agricultural production through Lantmännen. Furthermore, it is of interest to investigate the perception of climate change and how well adaptation strategies are being implemented for maintaining a financially stable production. To comprehend factors influencing the rate of implementation and adaptation to climate change, the reader additionally needs to comprehend market circumstances and the impact of attitudes on producers' decision-making. Furthermore, it is of significance to the reader to understand how institutions such as the EU promote and support producers, and how this is received by the member states, specifically Sweden. The theoretical framework in which this research is based includes Contingency theory, Institutional theory, and SWOT analysis. This research is conducted through a qualitative research method, including a narrative literature review. The author conducted interviews with five respondents from the organization Lanmännen. The respondents were asked to answer the questions found in Annex 1. The answers are further presented in Chapter 4. The research shows how different market conditions contribute to the attitudes of the producers. Furthermore, attitudes of producers are significantly linked to formal and informal institutions, which in turn affects various contingencies forming an organization. The created policy frameworks, in combination with Lantmännens communication to producers, constitutes how well adaptation strategies are implemented by producers

Divergent paths in regional economic development: A tale of two festival towns

This study compares how two small communities in rural settings tried to promote sustained economic development by capitalizing on local music festivals. Merritt, British Columbia, Canada, home to a large country music event, focused on place branding, marketing, and related entertainment initiatives. Hultsfred, Sweden, in contrast, used its iconic rock festival to create a year-round music industry cluster called RockCity. Our study argues that the alternative strategies reflect fundamental differences in economic development policies and governance structures. We subsequently question whether RockCity-like cluster initiatives are possible in the Canada without coordinated tools and programs for supporting cultural industries in small communities.Peer reviewe

What can we learn from the past? Tracking sustainability indicators for the Swedish dairy sector over 30 years

CONTEXT: The dairy sector has undergone profound transformation over recent decades, resulting in considerably fewer but larger and more specialised farms, with unclear implications across sustainability dimensions. OBJECTIVE: The objective was to develop and employ a framework for assessing sustainability in the Swedish dairy sector to shed light on how recent historical developments (1990–2020) have influenced sustainability outcomes. METHODS: Using a data-driven, multidisciplinary approach, main areas of concern for sustainability in the primary production stages of the dairy sector were identified. These were then populated with indicators to track developments over time and highlight synergies and trade-offs. RESULTS AND CONCLUSIONS: Four areas of concern were identified and populated with eight indicators (listed in brackets): ‘supporting ecosystems’ (semi-natural grassland area, ley area, mean field size), ‘climate impact’ (methane from enteric fermentation), ‘animal welfare’ (veterinary treatments, percentage of culled cows due to diseases) and ‘farm viability’ (competitive wages, farmer age structure). The results showed that area of semi-natural grassland per dairy cow decreased by 27% from 2003 to 2020. Area of ley per cow decreased slightly but the proportion of arable land on dairy farms devoted to ley cultivation increased, due to improved roughage quality enabling an increase in proportion of roughage in feed rations. In terms of climate impact, enteric methane emissions per kg milk decreased by 21%. Regarding animal welfare, veterinary treatments of diseases decreased from 45% to 21% over the 30 years, with declining trends for most recorded diseases except hoof disease. The indicators for farm viability showed that the average dairy farm was unable to pay a wage comparable to the national average throughout most of the period 2004–2020, but a slightly positive trend was observed, although with large year-on-year variability. A rapid change in age structure was seen between 2003 and 2020, with the proportion of land managed by older farmers (+60 years) increasing from 12% to 22%, indicating challenges with demographic viability. SIGNIFICANCE: Tracking changes over time across sustainability dimensions gives important insights into improvements made and challenges that remain to be solved. Overall, developments in the Swedish dairy sector have diminished its capacity to support ecosystems, particularly related to semi-natural grasslands, while reducing its climate impacts and improving animal welfare. An increased specialisation has also resulted in spillover effects where services and impacts have shifted from dairy herds to specialised beef herds. These findings are important in navigating policy processes targeting developments in the dairy sector

What can we learn from the past? Tracking sustainability indicators for the Swedish dairy sector over 30 years

CONTEXT: The dairy sector has undergone profound transformation over recent decades, resulting in considerably fewer but larger and more specialised farms, with unclear implications across sustainability dimensions.OBJECTIVE: The objective was to develop and employ a framework for assessing sustainability in the Swedish dairy sector to shed light on how recent historical developments (1990-2020) have influenced sustainability outcomes.METHODS: Using a data-driven, multidisciplinary approach, main areas of concern for sustainability in the primary production stages of the dairy sector were identified. These were then populated with indicators to track developments over time and highlight synergies and trade-offs.RESULTS AND CONCLUSIONS: Four areas of concern were identified and populated with eight indicators (listed in brackets): 'supporting ecosystems' (semi-natural grassland area, ley area, mean field size), 'climate impact' (methane from enteric fermentation), 'animal welfare' (veterinary treatments, percentage of culled cows due to diseases) and 'farm viability' (competitive wages, farmer age structure). The results showed that area of seminatural grassland per dairy cow decreased by 27% from 2003 to 2020. Area of ley per cow decreased slightly but the proportion of arable land on dairy farms devoted to ley cultivation increased, due to improved roughage quality enabling an increase in proportion of roughage in feed rations. In terms of climate impact, enteric methane emissions per kg milk decreased by 21%. Regarding animal welfare, veterinary treatments of diseases decreased from 45% to 21% over the 30 years, with declining trends for most recorded diseases except hoof disease. The indicators for farm viability showed that the average dairy farm was unable to pay a wage com-parable to the national average throughout most of the period 2004-2020, but a slightly positive trend was observed, although with large year-on-year variability. A rapid change in age structure was seen between 2003 and 2020, with the proportion of land managed by older farmers (+60 years) increasing from 12% to 22%, indicating challenges with demographic viability.SIGNIFICANCE: Tracking changes over time across sustainability dimensions gives important insights into improvements made and challenges that remain to be solved. Overall, developments in the Swedish dairy sector have diminished its capacity to support ecosystems, particularly related to semi-natural grasslands, while reducing its climate impacts and improving animal welfare. An increased specialisation has also resulted in spillover effects where services and impacts have shifted from dairy herds to specialised beef herds. These findings are important in navigating policy processes targeting developments in the dairy sector