A Phoenix in Flames? Portfolio Choice and Violence in Civil War in Rural Burundi

This paper challenges the idea that farmers revert to subsistence farming when confronted with violence from civil war. Macro-economic evidence on economic legacies of civil war suggests that civil wars, while obviously disastrous in the short run, do not need to have persistent effects on long term economic outcomes. New micro-level studies are ambiguous about the impact of civil war for welfare. Several studies find long lasting negative effects, particularly through reduced human capital formation while others for example report increased participation in collective action programs and the emergence of local institutions. We investigate to what extend individual incentives for investments are affected by civil war. Using several rounds of (panel) data at the farm and community level, we find that farmers in Burundi who are confronted with civil war violence in their home communities increase export and cash crop growing activities, invest more in public goods, and reveal higher levels of subjective welfare evaluations. We interpret this in the light of similar recent micro-level evidence that points to post-traumatic growth effects after (civil) war fare. Our results are confirmed across specifications as well as in robustness analyses

The Consequences for Consumer Welfare of the 2001-2003 Electricity Distribution Price Review in The Netherlands

The Dutch regulatory process for setting the first X-Factors in the electricity distribution sector has gone badly wrong. During two-and-a-half years four different X-Factors were published by the regulator. These X-Factors fluctuated wildly. We demonstrate that Dutch electricity consumers will pay at least €300mln. more over three years for the distribution of electricity than might otherwise have been the case. We estimate that benefits for companies in terms of extra revenue from lowered X-Factors amounts to 3~5 percent of total asset value. We provide a history of the regulatory process and analyse the impact of the different X-Factors on the final bills of consumers. The negative political reaction to the perceived problems of regulation has hampered the course of deregulation and the privatisation of the municipally-owned electricity companies. The Minister of Economic Affairs and the majority of Parliament want the complete ownership unbundling of the sector by 1 January 2007.electricity, price review, RPI-X, Netherlands, distribution networks

The Socio-Economic Value of Natural Riverbanks in the Netherlands

Ecologists and economists both use a different approach to determine the value of nature. Its ecological value can be measured using criteria like rarity and diversity of species in an ecosystem. The economic value can be determined using non-market valuation techniques. This paper focuses on an empirical application of the Contingent Valuation Method (CVM) to find out whether this valuation method is a suitable method to estimate the economic value of natural riverbanks in the Netherlands. Natural riverbanks will provide habitat for species that particularly depend on the land water transit area. Since common riverbanks do not provide this habitat, natural river banks increase biodiversity in the Netherlands. On the basis of technical and ecological characteristics nine different types of natural riverbanks were distinguished. For each type a laymen description was made. This description served as a basis for economic valuation by means of CVM. The results of the CVM study shows that the average willingness to pay for non-use of a natural riverbank varied between 16 and 25 Dutch guilders per household year. The willingness to pay for recreational use ranged from 1,07 to 2,50 guilders per visit. The generated outcomes proved to be consistent with results from other studies. At first sight, the economic value of natural riverbanks seemed to be higher than their construction and maintenance cost.Nature friendly river banks, Land water interactions, Economic value, Nature, CVM, Non-use value

The Consequences for Consumer Welfare of the 2001-2003 Electricity Distribution Price Review in The Netherlands

The Dutch regulatory process for setting the first X-Factors in the electricity distribution sector has gone badly wrong. During two-and-a-half years four different X-Factors were published by the regulator. These X-Factors fluctuated wildly. We demonstrate that Dutch electricity consumers will pay at least €300mln. more over three years for the distribution of electricity than might otherwise have been the case. We estimate that benefits for companies in terms of extra revenue from lowered X-Factors amounts to 3~5 percent of total asset value. We provide a history of the regulatory process and analyse the impact of the different X-Factors on the final bills of consumers. The negative political reaction to the perceived problems of regulation has hampered the course of deregulation and the privatisation of the municipally-owned electricity companies. The Minister of Economic Affairs and the majority of Parliament want the complete ownership unbundling of the sector by 1 January 2007

Rebel Recruitment in a Coffee Exporting Economy

Recent literature in the political economy of civil war has pointed to the importance of (changes) in the economic environment for the understanding of conflict dynamics. Three channels, negative income shocks, the presence of exportable commodities and indiscriminate violence inflicted on one’s community are considered as drivers of conflict. This paper studies these channels with a new fifteen-year panel of community level data on Burundi whose coffee sector is intimately intertwined with the civil war. We find that indiscriminate violence inflicted at the start of the civil war (1993) continued to affect recruitment throughout the entire civil war. We also find that decreases in the producer price of coffee increases recruitment. Aiming to distinguish the resentment aspect from the opportunity aspect in low producer prices, we perform robustness tests with different specifications and with year-province rainfall shocks affecting overall agricultural income, not just coffee. Results indicate that it is the opportunity cost mechanism that drives increased recruitment.Civil war, recruitment, indiscriminate violence, coffee, rainfall

A Phoenix in Flames? Portfolio Choice and Violence in Civil War in Rural Burundi

This paper challenges the idea that farmers revert to subsistence farming when confronted with violence from civil war. While there is an emerging macroeconomic consensus that wars are detrimental to development, we find contrasting microeconomic evidence. Using several rounds of (panel) data at the farm and community level, we find that farmers in Burundi who are confronted with civil war violence in their home communities increase export and cash crop growing activities, invest more in public goods and reveal higher levels subjective welfare evaluations. We interpret this in the light of similar recent micro-level evidence that points to post-traumatic growth effects after (civil) warfare. Our results are confirmed across specifications as well as in robustness analyses.Civil war, investment, post-traumatic growth

A Phoenix in Flames? Portfolio Choice and Violence in Civil War in Rural Burundi

This paper challenges the idea that farmers revert to subsistence farming when confronted with violence from civil war. Macro-economic evidence on economic legacies of civil war suggests that civil wars, while obviously disastrous in the short run, do notCivil war, investment, post-traumatic growth

The maximum incremental social tolerable irreversible costs (MISTICs) and other benefits and costs of introducing transgenic maize in the EU-15

The decision to release a new transgenic crop variety for planting in the European Union (EU) is a decision under irreversibility and uncertainty. We use a real option model to assess the ex-ante incremental benefits and costs of the decision to release Bt maize and HT maize in the EU-15 member states. The analysis uses Eurostat data for modelling the benefits and costs of non-transgenic maize using partial equilibrium models. The farm-level benefits and costs of Bt maize and HT maize are derived from field trials conducted within the EU-funded ECOGEN project in combination with secondary data sources. Adoption curves, hurdle rates and Maximum Incremental Social Tolerable Irreversible Costs (MISTICs) are calculated at country level for selected EU-15 member states. In general, the results show that the MISTICs on a per capita level are very small confirming previous results calculated in values for the year 1995. The MISTICs per farm are much larger. This indicates a problem for decision makers.agriculture policy, biotechnology, GMOs, MISTICs,technical change