The Economics of Agricultural Development: What Have We Learned?

The history of thought in the field of Economic Development and corresponding development programs have gone through a series of identifiable phases. Phases of theory and praxis in Agricultural Development are likewise compared. In both cases, there is an apparent lost opportunity to learn the lessons of past failures and successes before moving to the next fad. After reviewing several policy and program areas, a few lessons are synthesized, a forward-looking research framework suggested, and the appropriate role of foreign aid discussed. A particular theme of interest is the balance in thinking and programs between social engineering and facilitation of economic cooperation.International Development,

PARETO-IMPROVING WATER MANAGEMENT OVER SPACE AND TIME

Proposals for marginal cost water pricing have often been found to be politically infeasible because current users will have to pay a higher price even though future users will be better off. We show how efficiency pricing can be rendered Pareto-improving, and thus politically feasible, by compensating the users suffering a loss due to higher prices. We also provide a method for determining efficient spatial and inter-temporal water management for a system with consumption at significantly different elevations supplied from a renewable coastal aquifer, which is subject to salinity if over-extracted.Resource /Energy Economics and Policy,

An Analysis of Economic Policies Affecting the Philippine Coconut Industry

What are the effects of government policies, such as export tax, production levy and marketing regulation, on the Philippine coconut industry? The answer to this question is made central to this research paper.coconut industry

Sequencing Renewables: Groundwater, Recycled Water, and Desalination

Optimal recycling of minerals can be thought of as an integral part of the theory of the mine. In this paper, we consider the role that wastewater recycling plays in the optimal extraction of groundwater, a renewable resource. We develop a two-sector dynamic optimization model to solve for the optimal trajectories of groundwater extraction and water recycling. For the case of spatially increasing recycling costs, recycled water serves as a supplemental resource in transition to the steady state. For constant unit recycling cost, recycled wastewater is eventually used as a sector-specific backstop for agricultural users, while desalination supplements household groundwater in the steady state. In both cases, recycling water increases welfare by shifting demand away from the aquifer, thus delaying implementation of costly desalination. The model provides guidance on when and how much to develop resource alternatives.Renewable resources, dynamic optimization, groundwater allocation, wastewater reuse, recycling, reclamation, water quality, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q25, Q28, C6,

Risk Aversion as Effort Incentive: A Correction and Prima Facie Test of the Moral Hazard Theory of Share Tenancity

We show that Stiglitz's (1974) classic principal-agency theory of share tenancy does not imply, as alleged, that the optimal tenant share is less than one for risk-averse tenants nor that the share decreases monotonically with the tenant's inherent risk aversion. Tenants may self insure by working harder--increasingly so for higher levels of risk aversion--with the result that the more risk averse work for higher instead of lower shares. When the model is parameterized based on previous studies of Philippine agriculture, it predicts a U-shaped relationship between optimal tenant's share and inherent risk aversion. Landlords choose rent contracts for both high and low levels of risk aversion. For intermediate levels, the optimal sharing rates are 80% and above. In contrast, actual sharing rates in the study area ranged from 50-60%, with most farmers contracted on a 50:50 basis. We conclude that the risk-aversion versus moral hazard theory of tenure choice is incomplete. Rent contracts must have additional disadvantages and/or share tenancy additional benefits that are not accounted for in the static principal-agency theory.

Water Management and the Valuation of Indirect Environmental Services

Comprehensive water basin and watershed planning and management require valuation of the intermediate ecological services provided to the water resources themselves. Valuation of forest cover in the augmentation of water resources is discussed in the context of aggregate economic planning, water-basin or sectoral planning, and conservation project evaluation. The importance of valuing intermediate non-market goods is illustrated for each planning tool in the context of an illustrative example of the Pearl Harbor/Ko'olau watershed in Hawaii. In the context of water allocation and investment in waterworks, considerations of full income valuation imply that the value of water should incorporate the risk of watershed degradation contingent on the expected conservation effort. What appear to be new objectives of economic planning, such as sustainable development, do not require new criteria but rather the augmentation of existing methods of income accounting and project valuation to include the values on non-market goods. We also show that measurement of non-market valuation does not necessarily require the use of contingent-valuation methods, even when the usual alternatives (hedonics, household production, etc.) are not directly applicable.

Heterogenous Human Capital in a Model of Coalitional Bargaining Between Multinational Corporations and Host Country Enterprises

We use the logic of ex-ante coalitional bargaining to explain the stylized fact that technology licensors typically cannot extract the entire surplus generated by their international licensing transactions. We assume a multinational corporation capable of supplying an 'external management' input (e.g. supply-chain management) and two types of host-country enterprise--one able to supply only an 'internal management' input (e.g. labor supervision) and the other able to provide both types of management. Cooperation with the first type requires profit sharing, but as this does not give adequate incentives to either side, the result is a Nash equilibrium in input levels. In order to avoid this suboptimal outcome, licensors bid up the rents they offer to the second type, which can be incentivized to supply first-best levels of both inputs through contracts specifying only a fixed per-period licensing fee.

Markets, Institutions and Family Size in Rural Philippine Households

This article has been presented at the Workshop on Methods for Agricultural Policy Analysis held at the UP Los Baños on August 13-14, 1985. It develops a framework for explaining the nonmarket to market transitions. In particular, this framework is used to generate specific hypotheses confronted with evidence from the Philippine rural households.health sector, agriculture sector, fertility, rural sector, econometric modeling

Integrated Prevention and Control of Invasive Species

An emerging problem for environmental policy is how to design efficient strategies for the prevention and control of invasive species. However, the literature has mostly focused either on pre-introduction prevention or post-introduction control of an invasive. The benefits of prevention cannot be understood or estimated without knowing the costs of post-introduction control. This paper provides an integrated framework where optimal prevention is combined with optimal pest removal.Environmental Economics and Policy,