Detecting illegal trade practices by analyzing discrepancies in forest products trade statistics : An application to Europe, with a focus on Romania

Discrepancies in bilateral trade statistics for forest products have recently attracted attention as potential indicators of illegal trade practices. For example, if exporters understate quantities to evade export taxes or quotas, then one might expect reported exports to be less than reported imports. Discrepancies in trade statistics can exist for reasons that have nothing to do with illegal activities, however, such as measurement error and shipment lags. Any attempt to infer evidence of illegal activities from statistical discrepancies must control for these other explanations. The author estimates the discrepancies between reported imports and exports for bilateral flows of sawnwood traded by Romania and other European countries. The author also examines whether these discrepancies reflect illegal activities by the traders. The mean discrepancy for sawnwood exported by Romania during 1982-97 was significantly different from zero for coniferous sawnwood but not for nonconiferous sawnwood. Yet the sign of the discrepancy for coniferous sawnwood-reported exports tended to be greater than reported imports-implies that illegal trade activities were more likely occurring in Romania's trading partners than in Romania. An econometric analysis of bilateral trade statistics for Romania and other European countries finds evidence that measurement error, shipment lags, and intentional underreporting all play a role in explaining discrepancies for both types of sawnwood. The econometric model is not sufficiently reliable, however, for estimating the portion that was due solely to illegal activities or determining whether those activities occurred primarily in Romania or in its trading partners. Moreover, given that it is based on observed discrepancies in bilateral trade statistics, it fails to detect illegal trade activities that occur simultaneously in both importing and exporting countries. For these reasons, econometric methods appear unlikely to be of practical use in revealing illegal trade activities in the Romanian forest sector.Environmental Economics&Policies,Economic Theory&Research,Development Economics&Aid Effectiveness,Trade Policy,Agribusiness&Markets,Trade Policy,Economic Theory&Research,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies,Agribusiness&Markets

Promoting better logging practices in tropical forests

The study presented in this paper tests the empirical significance of several common recommendations for promoting better logging practices in tropicalforests: in particular, making concession agreements longer, linking renewal of those agreements to logging practices, and using performance bonds to encourage compliance with logging regulations. It assesses how these recommendations affect both the economics of timber harvesting and the provision of environmental benefits. With regard to the latter it focuses on carbon sequestration and biodiversity. It also examines the effects of timber fees and discount rates on economic and environmental outcomes. The study focuses on two aspects of logger behavior: choice of logging technology and compliance with prescribed minimum diameter cutting limits. The study analyzes loggers'decisions about technology and cutting limits in two scenarios: (i) the repeated harvesting of a given forest stand (virgin forest for the initial harvest, second growth forest for subsequent harvests), which occurs at a time delay of several decades (the cutting cycle); and (ii) the sequential harvesting of an annual series of different forest stands with identical characteristics (all virgin). The former gets at issues of sustainable forest management, while the latter gets at the mining of virgin timber stocks. In this way, the study examines both the long-run and short-run dynamics of logger behavior. The paper is organized as follows. The authors begin by describing the models of forest growth and logger behavior that comprise the simulation model. The description of the forest growth model includes the indicators used to predict the environmental impacts of logging, and the description of the model of logger behavior includes the regulatory instruments analyzed. Next, they present and discuss the simulation results, dealing with repeated harvesting and sequential harvesting in turn. In the final section the report highlights the principal conclusions that can be drawn from these results.Forests and Forestry,Environmental Economics&Policies,Water Conservation,Silviculture,Agribusiness,Environmental Economics&Policies,Agricultural Trade,Agribusiness,Forestry,Silviculture

Nature, socioeconomics and adaptation to natural disasters: new evidence from floods

The authors analyze the determinants of fatalities in 2,194 large flood events in 108 countries between 1985 and 2008. Given that socioeconomic factors can affect mortality right in the aftermath of a flood, but also indirectly by influencing flood frequency and magnitude, they distinguish between direct and indirect effects of development on flood mortality. The authors find that income is negatively associated with the frequency of floods and, conditional on their magnitude, the fatalities they cause in developing countries. However, for developed countries they find that increased income is associated with more fatalities, both directly (conditional on flood occurrence and magnitude) and indirectly through an increase in the frequency and magnitude of flood events. Also in contrast to the literature, they find that the effect of governance on flood frequency and fatalities in developing countries is U-shaped, with improvements in governance reducing the numbers of floods and deaths when governance is weaker but raising them when governance is stronger.Hazard Risk Management,Natural Disasters,Governance Indicators,Disaster Management,Flood Control

Why do Nigerian manufacturing firms take action on AIDS?

Objective: To identify differences between manufacturing firms in Nigeria that have undertaken HIV/AIDS prevention activities and those that have not as a step toward improving the targeting of HIV policies and interventions. Methods: A survey of a representative sample of registered manufacturing firms in Nigeria, stratified by location, workforce size, and industrial sector. The survey was administered to managers of 232 firms representing most major industrial areas and sectors in March-April 2001. Results: 45.3 percent of the firms’ managers received information about HIV/AIDS from a source outside the firm in 2000; 7.7 percent knew of an employee who was HIV-positive at the time of the survey; and 13.6 percent knew of an employee who had left the firm and/or died in service due to AIDS. Only 31.7 percent of firms took any action to prevent HIV among employees in 2000, and 23.9 percent had discussed the epidemic as a potential business concern. The best correlates of having taken action on HIV were knowledge of an HIV-positive employee or having lost an employee to AIDS (odds ratio [OR] 6.36, 95% confidence interval [CI]: 2.30, 17.57) and receiving information about the disease from an outside source (OR 7.83, 95% CI: 3.46, 17.69). Conclusions: Despite a nationwide HIV seroprevalence of 5.8 percent, as of 2001 most Nigerian manufacturing firm managers did not regard HIV/AIDS as a serious problem and had neither taken any action on it nor discussed it as a business issue. Providing managers with accurate, relevant information about the epidemic and practical prevention interventions might strengthen the business response to AIDS in countries like Nigeria

Detecting collusion in timber auctions : an application to Romania

Romania was one of the first transition countries in Europe to introduce auctions for allocating standing timber (stumpage) in public forests. In comparison with the former system in the country-administrative allocation at set prices-timber auctions offer several potential advantages: greater revenue generation for the government, a higher probability that tracts will be allocated to the firms that value them most highly, and stronger incentives for technological change within industry and efficiency gains in the public sector. Competition is the key to realizing these advantages. Unfortunately, collusion among bidders often limits competition in timber auctions, including in well-established market economies such as the United States. The result is that tracts sell below their fair market value, which undermines the advantages of auctions. This paper examines the Romanian auction system, with a focus on the use of econometric methods to detect collusion. It begins by describing the historical development of the system and the principal steps in the auction process. It then discusses the qualitative impacts of various economic and institutional factors, including collusion, on winning bids in different regions of the country. This discussion draws on information from a combination of sources, including unstructured interviews conducted with government officials and company representatives during 2003. Next, the paper summarizes key findings from the broader research literature on auctions, with an emphasis on empirical studies that have developed econometric methods for detecting collusion. It then presents an application of such methods to timber auction data from two forest directorates in Romania, Neamt and Suceava. This application confirms that data from Romanian timber auctions can be used to determine the likelihood of collusion, and it suggests that collusion reduced winning bids in Suceava in 2002 and perhaps also in Neamt. The paper concludes with a discussion of actions that the government can take to reduce the incidence of collusion and minimize its impact on auction outcomes.Forestry,Wildlife Resources,Markets and Market Access,Access to Markets,Technology Industry

Evaluation of CEEPA's IDRC/SIDA-funded "Capacity Strengthening Program in Environmental Economics and Policy Analysis" (2006-2012)

In Utilization Focused Evaluation (UFE) evaluators facilitate a learning process with attention on how real people in the real world apply evaluation findings and experiences. The focus is on “intended use by intended users.” This case study is one of five test cases in the application of the UFE process towards strengthening research capacity, while introducing UFE as part of the work process. Singapore internet Research Centre (SiRCA) has developed broad based high quality, multidisciplinary social science research in ICT4D in Asia. Using the 12 steps outline of UFE, SiRCA analyzed its organizational gaps, developing a “theory of change.

Environment as a production input : a tutorial

The paper examines and reviews relationships among three key functions in production economics: production functions, cost functions, and profit functions, and how they can be used to value changes in environmental quality. A cost function is an economic relationship that relates the minimum cost of production to the quantity of output, the prices of variable inputs, and the quantities of fixed inputs, including environmental inputs. The paper demonstrates the application of some mathematical models, for calculating variables and possible outcomes. The work can be used as a tutorial for production economics

Impact of surface roughness on diffusion of confined fluids

Using event-driven molecular dynamics simulations, we quantify how the self diffusivity of confined hard-sphere fluids depends on the nature of the confining boundaries. We explore systems with featureless confining boundaries that treat particle-boundary collisions in different ways and also various types of physically (i.e., geometrically) rough boundaries. We show that, for moderately dense fluids, the ratio of the self diffusivity of a rough wall system to that of an appropriate smooth-wall reference system is a linear function of the reciprocal wall separation, with the slope depending on the nature of the roughness. We also discuss some simple practical ways to use this information to predict confined hard-sphere fluid behavior in different rough-wall systems

Composition and concentration anomalies for structure and dynamics of Gaussian-core mixtures

We report molecular dynamics simulation results for two-component fluid mixtures of Gaussian-core particles, focusing on how tracer diffusivities and static pair correlations depend on temperature, particle concentration, and composition. At low particle concentrations, these systems behave like simple atomic mixtures. However, for intermediate concentrations, the single-particle dynamics of the two species largely decouple, giving rise to the following anomalous trends. Increasing either the concentration of the fluid (at fixed composition) or the mole fraction of the larger particles (at fixed particle concentration) enhances the tracer diffusivity of the larger particles, but decreases that of the smaller particles. In fact, at sufficiently high particle concentrations, the larger particles exhibit higher mobility than the smaller particles. Each of these dynamic behaviors is accompanied by a corresponding structural trend that characterizes how either concentration or composition affects the strength of the static pair correlations. Specifically, the dynamic trends observed here are consistent with a single empirical scaling law that relates an appropriately normalized tracer diffusivity to its pair-correlation contribution to the excess entropy.Comment: 5 pages, 4 figure