Excess capacity and overfishing are problems in the open-access, common-pool fisheries of the Java Sea. Data development analysis is used to estimate excess fishing capacity and the number of vessels to decommission in three Java Sea fisheries of Indonesia, the purse seine, mini purse seine, and longline. First- and second-best policy measures are discussed to reduce the excess capacity and give sustainable management and development. The importance of incentive design, asymmetric information, and the regulator's principal–agent problem are emphasized in license limitation programs.

Lithuania is one of ten countries in Central and Eastern Europe that is aligning its environmental policies with those of the European Union (EU). The costs of harmonizing environmental policies are expected to be extremely high and to fall disproportionately on local governments. One policy option for financing these service upgrades is to use increased tariffs. We evaluate the feasibility of this strategy by estimating household willingness to pay for upgraded landfill, sewerage, and recycling programs. We then compare estimated benefits with costs from the literature. We find that household willingness to pay is substantial for upgraded landfill management and expanded sewerage service, but virtually zero for the two recycling programs considered. Relative to costs, households are willing to pay approximately 80–90 per cent of costs for landfill improvement, but less than 10 per cent for upgraded sewerage service and recycling programs. These results suggest that targeted subsidies will be critical to fund the municipal environmental expenditures required for Lithuania to join the EU.

Artisanal fishing communities include some of the ‘poorest of the poor’. Using data from gill net fishers in Malaysia, the paper presents the first technical efficiency study of an artisanal fishery and finds that artisanal fishers are poor, but enjoy a high level of technical efficiency. If the relatively high levels of technical efficiency found in the Malaysian gill net fishery existed in other artisanal fisheries, it suggests that targeted development assistance that has traditionally been focussed on the harvesting sector may be better directed to other priorities in artisanal fishing communities.

This paper presents the operational procedures involved in incorporating the environmental costs in the cost–benefit analysis of a hydro-electric project. The proposed project, if implemented, would result in the loss of 2,800 hectares of tropical forests and dislocation of two settlements of about 200 families who are currently dependent on the forests for their livelihood. The forests are mainly used for extracting reed – a material used both by traditional artisans and the paper-pulp industry. The potential environmental costs and benefits of the project are identified and approximate estimates of some of these costs are made for items such as carbon sequestration, bio-diversity, and so on, based on similar estimates made elsewhere. These estimated environmental costs are incorporated into the analysis, and the hypothetical estimate of the non-use value, which would make the project's net benefit zero, is estimated under different discount rates. The analysis brings into sharp focus some crucial factors that have a direct bearing on the social trade-off involved in the project choice.

This paper analyses the impact of citizens' actions for protecting the environment in the context of the institutional features of developing countries. The enforcement of environmental regulation is likely to be weak in developing countries, and thus their citizens are being compelled to sue the polluters or take direct actions that are costly to the polluter. The theoretical and empirical analysis, based on 25 cases of citizens' action from the Kerala State of India, show that their impact is influenced by the institutional deficiencies of the country. Such deficiencies include the delay in resolving conflicts through court interventions and the lower cost of taking actions of civil disobedience due to poor law and order enforcement. The analysis leads to the conclusion that citizens' actions may not be very effective in controlling pollution from existing factories, and may be effective in blocking the establishment of new factories. Both these outcomes, i.e., the continued pollution in existing factories, and zero-pollution (or non-establishment) of new factories/projects, cause social losses, in the former case for the citizens and in the latter for the polluter.

This paper examines the nature of community management of woodlots and investigates the determinants of collective action and its effectiveness in managing woodlots, based on a survey of 100 villages in Tigray, northern Ethiopia. Despite limited current benefits received by community members, the woodlots contribute substantially to community wealth, increasing members' willingness to provide collective effort to manage the woodlots. We find that benefits are greater and problems less on woodlots managed at the village level than those managed at a higher municipality level, and that the average intensity of management is greater on village-managed woodlots. The factors that do significantly affect collective action include population density (higher collective labor input and lower planting density at intermediate than at low or high density), market access (less labor input, planting density and tree survival where market access is better), and presence of external organizations promoting the woodlot (reduces local effort to protect the woodlot and tree survival). The finding of an inverse U-shaped relationship between population density and collective labor input is consistent with induced innovation theory, with the increased labor/land ratio promoting collective effort to invest in resources as population density grows to a moderate level, while incentive problems may undermine collective action at high levels of population density. These findings suggest collective action may be more beneficial and more effective when managed at a more local level, when the role of external organizations is more demand-driven, and when promoted in intermediate population density communities more remote from markets. In higher population density settings and areas closer to markets, private-oriented approaches are likely to be more effective.

In the present study, integrated models have been developed to find out the most appropriate cost of municipal solid waste (MSW) disposal using two potential and widely used methodologies, viz. landfill system with gas recovery (LFSGR) and aerobic composting (AC). Objective functions with important costs and benefits including externalities were developed to find out the net unit cost of disposal. Multivariate functional models have been developed for each activity of the objective functions. These integrated techno-economic models can be used not only to determine the most appropriate cost of waste disposal, but also to explain the interparametric linkages and even to compare the potentiality and suitability of a particular methodology for a set of conditions. This can give valuable information that can enhance environmental management leading to sustainable development.

In the simulation studies carried out, LFSGR with its proven energy generating potential from MSW in the form of landfill gas, was found to perform better than aerobic composting (AC) for rates of waste generation greater than 1,000–2,000 t/d (tons per day). LFSGR showed a better performance irrespective of the landfill collection system installation and operation costs. For both methodologies, unit cost of disposal was most sensitive to land rent followed by, in the case of LFSGR, the organic content.

Farm households in developing countries are generally credit constrained. This forces them to simultaneously take production and consumption decisions. In this paper, a two-period lifecycle model of the farm household is constructed and the household's investment response to changes in land and agricultural output prices are derived theoretically. It is shown that in the absence of credit markets household responses to exogenous price changes may differ from the predictions of cost–benefit analysis. Farm household responses are also derived for the case where price increases for land and agricultural output are accompanied by the introduction of a credit market. For this case the results show that farm household reactions are in accordance with predictions made by cost–benefit analysis. An empirical case study from Bénin underscores the relevance of considering access to credit in establishing whether investments in soil conservation are beneficial to farm households.

Advances in biotechnology have made available gene-manipulation techniques that enable the protection of genetic material from unauthorized use and the prevention of self-supply of commercial seeds by farmers—in order to allow enhanced appropriation of the values of innovation in agricultural R&D. These techniques have become known as Genetic Use Restriction Technologies (GURTs).

This paper forecasts the potential impact of wide-spread adoption of GURTs by the providers of HYV seeds on the yield development in developing countries. To do so, it assesses (1) the effects of enhanced appropriation through GURTs on the technological expansion at the yield frontier and (2) the effects of technological protection of value-adding traits through GURTS on the diffusion of yield gains from the frontier to developing countries. These assessments are based on a particular hypothesis, which is that GURTs will replicate across most staple crops the experiences that were made with a previous use restriction technology (hybridization) in only a few crops. The estimation of impacts is carried out as a simulation and is based on expansion and diffusion parameters estimated for hybrid seeds over a 38-year period. It shows that the impact of GURTs on developing countries' yields will vary considerably. Specifically, those countries that currently have the lowest yields would be most adversely affected in their future yield development by the wide-spread use of GURTs.

Using the case of shade-grown coffee, this paper examines the market impacts of ‘eco-labels’ for credence attributes. First, the Mattoo and Singh (1994) test is conducted for the case of shade-grown coffee to investigate the market impacts of a shade label. This analysis in section 2 shows that a shade label could ‘pass’ the test, but the market impacts are likely to be minor. Section 2 also shows how to use estimates of supply, potential demand, and price elasticities of demand and supply to predict eco-label premiums in the post-label equilibrium. And second, given the importance of consumer demands for eco-label impacts, and since the theoretical foundations of demand for eco-labeled items are not well developed in the literature, Section 3 takes a closer look at the microeconomics of labels and consumer demand. A nested constant-elasticity-of-substitution preference structure is used to derive theoretically consistent Marshallian demands for shade and non-shade coffee. A numerical simulation shows how relative prices and consumer preferences for the credence attribute and variety are both important factors in demand creation of labeled items.

Two very similar contingent valuation surveys eliciting willingness-to-pay (WTP) to avoid eye irritation, gastroenteritis, and coughing episodes due to seawater pollution were conducted on visitors to beaches in Portugal and Costa Rica. Various forms of the hypothesis regarding the transfer of mean WTP between the two countries were rejected, as was the hypothesis that model parameters were drawn from the same pooled sample across countries for three different illness episodes. When compared to on-site studies in Costa Rica, benefit transfer from Portugal leads to errors typically of the order of 100 per cent. Adjusting WTP for declared income or other easily accessible socio-demographic variables does not reduce transfer error. This study shows that transfer of health benefit estimates can be potentially quite unhealthy for policy analysis, questioning whether the time and resource savings are justified in this particular transfer context.

Although genetically modified organisms (GMOs) have recently attracted a great deal of public attention, analysis of their economic impact has been far less common. This paper puts forward variants of a simple model of crop production, each one tailored to a particular aspect of transgenic food technology. The focus is on the possibility of monopolization and its consequential welfare costs. Risk factors identified include moderate cost savings from transgenic varieties, high seed storage costs, and high risks of crop loss. The paper also discusses some of the possible remedies including tighter regulation of anti-competitive practices and liberalization of the regulations governing the introduction of new GMOs.

A strategic issue facing many developing economies is the maintenance of natural resources, which are important in ecological terms as well as for providing income from tourism. This paper presents an analysis of the economic value of marine protected areas in the Seychelles. The contingent valuation method (CVM) is used to determine tourists willingness to pay (WTP) for visits to Seychelles' marine national parks. In addition, attitudinal and motivational data are related to respondents' stated economic preferences. Three hundred interviews were conducted in the Seychelles during June 1998 and both tourists having visited a park and a more general population of tourists were surveyed. The results demonstrate that different economic values are predicted for respondents from different countries who display a range of both consumer and citizen behaviour in constructing their preferences. In addition, significantly different WTP amounts are predicted depending on which particular marine parks are visited, and the expectations of visitors to Seychelles. The discussion focuses on exploring how this information may be of use to policy makers in setting a realistic pricing policy for visitors to Marine National Parks in the Seychelles.

The terminator gene can render seeds sterile, so forcing farmers to purchase fresh seed every year. It is a technological solution to the problem of market failure that could increase the appropriability of R&D investment more effectively than intellectual property rights legislation or patents. This paper shows that appropriability should be more than tripled and that this leads to greater private R&D investment, which may be expected to double or triple. This would bring open-pollinating varieties into line with F1 hybrids, for which seed cannot be saved. In turn, the increased investment should raise yield increases to levels similar to those for hybrid crops. Thus, there are benefits to set against the possible ecological and environmental costs and the clear distributional and social consequences. The paper discusses the way the seed market is developing, the possible impacts, especially from a developing country viewpoint, and considers the policy changes that are needed.

This study applies the hedonic pricing model to property sales in the township areas in Windhoek, the capital city of Namibia, where municipal authorities have pursued a programme of selling plots of land to settlers in order to encourage them into a formalized economic situation. We find that, apart from house quality, access to the central business district, access to marketplaces and access to transportation, environmental quality also has a large impact on property prices. Properties located close to a garbage dump sell at considerable discounts, while properties located close to a combined conservation and recreation area sell at premium prices. The results thus suggest that the hedonic pricing method can be useful for studying townships in developing countries, and that this can help to clarify the importance of environmental factors which are otherwise frequently neglected in town planning for township settlements.