Environmental policies are characterized by salient short-term costs and long-term benefits that are difficult to observe and to attribute to the government's efforts. These characteristics imply that citizens’ support for environmental policies is highly dependent on their trust in the government's capability to implement solutions and commitment to investments in those policies. Using novel survey data from Mexico City, we show that trust in the government is positively correlated with citizens’ willingness to support an additional tax approximately equal to a day's minimum wage to improve air quality and greater preference for government retention of revenues from fees collected from polluting firms. We find similar correlations using the perceived quality of public goods as a measure of government competence. These results provide evidence that mistrust can be an obstacle to better environmental outcomes.

Advocated across the international community for more than 15 years, the Extractive Industries Transparency Initiative (EITI) is now widely recognised as a hallmark anti-corruption scheme in the extractive sector. This study presents an assessment of the relationship between EITI membership and countries’ progress in tackling corruption. It provides the first study that looks at this issue using a ‘state-of-the-art’ indicator called the Bayesian Corruption Indicator. It also introduces an innovative estimation strategy combining entropy balancing with a difference-in-difference framework to address the baseline inequalities that exist between member and non-member countries. Contrary to the findings of many leading studies, this analysis finds corruption scores have improved significantly among EITI member countries. In particular, the evidence is strongest when we examine a sub-group of EITI members designated fully compliant with the initiative's transparency standards.

This paper seeks to understand the link between resource governance and investor expectations in resource-rich countries. We test whether voluntary membership in the Extractive Industries Transparency Initiative (EITI), a public-private partnership that promotes transparency and accountability in the extractives sector, behaves as a credible signalling mechanism to investors that governments in resource-rich countries can manage resource revenue and adhere to sustainable fiscal policies in the medium and long run. Using an interrupted time series analysis coupled with a fixed effects model, we examine whether investor expectations on the price of sovereign debt behave as a credible signalling mechanism in the presence of certain conditions. Results indicate that in some cases there is a significant change in spread on the default price of sovereign debt as a result of announcement of either EITI candidacy or EITI compliance. However, it is clear that EITI membership alone is not a sufficient signal to investors that a country can effectively manage its resource revenues in the long run because the result of EITI implementation is heavily influenced by country-specific conditions.

Adapting agricultural systems to changes in seasonal precipitation is critical for the agricultural sector in Sri Lanka. This paper presents evidence on the adoption drivers and the welfare impacts of agricultural strategies adopted by Sri Lankan rice farmers to adapt to low rainfall conditions. We estimate the causal impact of adopting different adaptive strategies across three different dimensions: (a) sensitivity to water stress, (b) household productivity, and (c) household livelihood conditions. The results highlight important trade-offs faced by farmers between reducing vulnerability to water stress and maximizing profitability and welfare outcomes. These findings are important for informing policies to support climate adaptation among smallholders, and to build and improve the climate resilience of Sri Lanka's rice sector.

We present evidence that international trade may exacerbate the initial unequal distribution of hydric resources. This result is driven by the fact that countries exporting agricultural goods are relatively abundant (with respect to capital) in the combined availability of water and arable land but, in absolute terms, scarce in capital and not richer in water in comparison to more developed ones. Due to both the scarcity of capital and the lower relative price of natural resources with respect to capital, the total value of production in these developing countries is modest, implying that international trade can lead to a less even distribution of the water content of consumption. Policies sustaining water prices and, more generally, those of natural resources (or lower capital costs) may contribute to offsetting this effect and allow for trade to play a positive role in reducing the uneven distribution of water endowments.