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The Ecological Footprint of Poverty Alleviation: Evidence from Mexico's Oportunidades Program
Abstract
We study the consequences of poverty alleviation programs for environmental degradation in Mexico. We exploit the community-level eligibility discontinuity for a conditional cash transfer program to identify the impacts of income increases on deforestation, and use the program’s initial randomized rollout to explore household responses. We find that additional income increases demand for resource-intensive goods. The corresponding production response and deforestation increase are more detectable in communities with poor road infrastructure. These results are consistent with the idea that better access to markets disperses environmental harm and the full effects of treatment can only be observed where poor infrastructure localizes them.
... The effect of income increase on deforestation is indeterminate (e.g., Angelsen and Kaimowitz 1999;Zwane 2007;Alix-Garcia et al. 2013). Multiple effects and causal pathways underlie this indetermination. ...
... Previous empirical research on developing countries associates income growth with forest cover change (e.g., Capistrano and Kiker 1995;Barbier and Burgess 1996). But most evidence addresses association rather than causality because of the limitation of data and methodology (see Angelsen and Kaimowitz 1999;Alix-Garcia et al. 2013). Rates of deforestation can be influenced by multiple factors, such as population growth, road construction, agricultural returns, and forest product prices (Li et al. 2015). ...
... But the literature is less concerned with the effect of remittances on forest cover change and is thin with respect to mediation analysis. In recent years, more systematic analyses of the underlying mechanisms have emerged (Alix-Garcia et al. 2013;Oldekop et al. 2018). We examine whether and how remittance income affects agricultural output and usage of input (fertilizer, pesticides, improved seeds, irrigation, and hired labor) from the production side as well as housing improvement and firewood collection from the consumption side. ...
... Does human economic progress have an unavoidable environmental cost? This is a central question for policymakers pursuing sustainable development and has been a long-standing debate in both the conservation and the economics literature (Arrow et al., 1995;Grossman and Krueger, 1995;Stern, Common and Barbier, 1996;Andreoni and Levinson, 2001;Foster and Rosenzweig, 2003;Dasgupta, 2007;Alix-Garcia et al., 2013). A key pillar of economic development is large-scale investment in transportation infrastructure that reduces the costs of moving goods and people across space. ...
... On deforestation specifically, see Koop and Tole (1999), Burgess et al. (2012), Alix-Garcia et al. (2013), andJayachandran et al. (2017). Assunção et al. (2017) provide causal evidence that rural electrification mitigated forest loss in Brazil. ...
... Similarly, income transfers to the poor (especially if significant and recurrent) can increase demand for landintensive consumption goods which, under certain conditions, can lead to increases in deforestation. For example, Alix-Garcia et al. (2013) explore the impact of the Oportunidades program on deforestation in Mexico. The authors find a significant increase in deforestation and attribute this to a shift in the consumption of more landintensive goods (such as meat and milk). ...
... Villagers could have refrained from targeting mature forests as a gesture of goodwill towards the donor (in accordance with the "winning the hearts and mind" or endorsement effect hypotheses of labeled unconditional transfers, as in Benhassine et al. 2015), though it is questionable whether the potentially more productive mature forest lands would not have been targeted if the aid could have provided access to expensive tree-felling machinery. In the longer term, or with higher value payments, it is possible that mature forests could be targeted (as shown in the study by Alix-Garcia et al. 2013). ...
Unconditional conservation payments are increasingly used by non-governmental conservation organizations to further their environmental objectives. One key objective in many conservation projects that use such unconditional payments schemes is the protection of tropical forest ecosystems in buffer zone areas around protected parks where the scope of instating mandatory restrictions is more limited. We use a randomized controlled trial to evaluate the impact of unconditional livelihood payments to local communities on land use outside a protected area-the Gola Rainforest National Park-which is a biodiversity hotspot on the border of Sierra Leone and Liberia. High resolution RapidEye satellite imagery from before and after the intervention was used to determine land use changes in treated and control villages. We find support for the hypothesis that unconditional payments, in this setting, increase land clearance in the short run. The study constitutes one of the first attempts to use evidence from a randomized control trial to evaluate the efficacy of conservation payments and provides insights for further research. © 2019 The Author(s) 2019. Published by Oxford University Press on behalf of the Agricultural and Applied Economics Association. All rights reserved.
... Over half of the 30 tropical countries with the most forest cover have CCTs, and others are planning to create them. One well-designed study (18) reported that CCTs in Mexico increased deforestation and argued that this impact arose after the transfers increased the consumption of land-intensive products. Our study finds that different mechanisms appear to dominate in an Indonesian context and these mechanisms could potentially dominate in many parts of Asia due to the importance of rice as a staple crop and growing market access in rural areas. ...
... Among poor agricultural households whose consumption and production decisions are intertwined, and whose access to credit and insurance is limited, cash transfers could change consumption and investment (26). Consumption of forest-intensive goods may increase, which could exacerbate deforestation if those goods are supplied by clearing forests (18), or reduce deforestation if those goods are supplied by conserving forests (16). Cash can also allow households to substitute forest-intensive goods with market-produced goods. ...
Solutions to poverty and ecosystem degradation are often framed as conflicting. We ask whether Indonesia’s national anti-poverty program, which transfers cash to hundreds of thousands of poor households, reduced deforestation as a side benefit. Although the program has no direct link to conservation, we estimate that it reduced tree cover loss in villages by 30% (95% confidence interval, 10 to 50%). About half of the avoided losses were in primary forests, and reductions were larger when participation density was higher. The economic value of the avoided carbon emissions alone compares favorably to program implementation costs. The program’s environmental impact appears to be mediated through channels widely available in developing nations: consumption smoothing, whereby cash substitutes for deforestation as a form of insurance, and consumption substitution, whereby market-purchased goods substitute for deforestation-sourced goods. The results imply that anti-poverty programs targeted at the very poor can help achieve global environmental goals under certain conditions.
... Thus, as PES evolve and acquire temporal maturity, with participants renewing their contracts and participating in different programme iterations, there is a need for adopting a dynamic lens to capture these changing aspects and how they influence effects. Tacconi et al., 2013) and distribution (Pham et al., 2014), as well as on the 'environmental' implications of social policies that provide additional income (Alix-García et al., 2013). Yet, there is a need to directly examine how multiple sources of income, PES and non-PES alike, combine to produce socioenvironmental effects. ...
... Yet, studies have also shown how CCT may exclude some members of the community from participation (Rawlings and Rubio, 2005), the problematic ways in which they may reinforce traditional gender roles (Molyneux, 2006(Molyneux, , 2007 and how they might even increase deforestation by increasing consumption of land intensive goods such as beef and milk (Alix-García et al., 2013). ...
Payments for Environmental Services (PES) emerged as a popular forest conservation policy across the Global South since the 1990s, first in Latin America and then elsewhere. PES aim to reduce deforestation and degradation by providing payments to participants conditional on forest protection. PES attracted much attention among policy-makers as a potentially cost-effective and efficient conservation alternative, and for their poverty-alleviation prospects when operating among ‘poor’ forest-dwellers. This rising agenda has been accompanied by significant scholarly efforts to understand PES and their socioenvironmental effects. However, such understandings have overlooked local stakeholder perspectives, and evaluations have mostly examined short-term effects. Thus, less is known about PES’ long-term effects, their determinants, and how local stakeholders perceive them.
Using a multidisciplinary, multi-level, and dynamic livelihood approach combining geospatial and socioeconomic data collected from 2013-2017, this thesis helps to fill this gap by examining PES’ role in the broader livelihood strategies of six communities in the Mexican Lacandona Rainforest. The thesis makes three main contributions to PES literature. Methodologically, it presents a novel lens to understand PES effects, one that brings to the fore the voice of local stakeholders, while paying attention to evolving context and design aspects. Empirically, it shows that participants think about their livelihoods at broader temporal and spatial scales than short-term policies, which allows them to exert some control on the various policies they encounter. This longer-term thinking is reflected in the three analytical chapters in this thesis that examine how people engage with PES among other land uses, how communities devise payment distribution mechanisms, and how people combine multiple policies to pursue various goals. Conceptually, it shows that unless aspects of ‘context’, ‘design’, and ‘decision-making’ are examined simultaneously, PES’ manifold, multi-level, and evolving effects will not be sufficiently understood. Overall, the thesis shows that there are real implications for conceptualising rural development policy as an integrated ‘policy matrix’, instead of individual and self-contained policies.
... An innovative topic and one of the few studies to find negative program impacts, comes from Alix- Garcia et al. (2013), which studies the environmental impact of the Program. Using a regression discontinuity approach based on the community margination index, which affects the order of which communities receive the program, they report that the Program doubles the probability that a community experiences deforestation (from a base of 4.9%) and that the average increase in deforestation is between 15 and 33% . ...
... Second, with regard to variables where impacts are not positive, suggest that providing income transfers might increase obesity of adults in Mexico, a country where obesity levels already rank among the highest in the world. Alix-Garcia et al. (2013) argue that the program has increased deforestation through increasing the consumption of resource intensive products and argues strongly for a welfare analysis of the program to include environmental impacts. ...
Conditional cash transfer (CCT) programs innovate by conditioning transfers to poor families on investments in the human capital of children and other family members. The Mexican CCT program Progresa/Oportunidades began in 1997 and has served as a model for many of the now over sixty countries with CCTs around the world, in large part due to its initial evaluation with an experimental design and numerous follow-up studies. This article reviews the literature on the development, evaluation, and findings of Progresa/Oportunidades, summarizing what is known about program effects, taking into account corrections for multiple-hypothesis testing.
... We use the word "empirical" to refer to studies that evaluate causal relationships and identify causal mechanisms by collecting and analyzing quantitative or qualitative data. Examples of empirical approaches are a randomized experimental design to assess whether community-based monitoring improves groundwater management (1), a quasi-experimental design to assess whether an antipoverty program increases deforestation (2), and a process-tracing design to identify the empirical mechanism that links the need for joint action and collaborative output in flood risk management (3). In contrast, "modeling" refers to studies that build and use process-or agent-based models to investigate the effects of changes in causal variables or structures, or to identify causal mechanisms through simulating system states and trajectories. ...
Scientists seek to understand the causal processes that generate sustainability problems and determine effective solutions. Yet, causal inquiry in nature–society systems is hampered by conceptual and methodological challenges that arise from nature–society interdependencies and the complex dynamics they create. Here, we demonstrate how sustainability scientists can address these challenges and make more robust causal claims through better integration between empirical analyses and process- or agent-based modeling. To illustrate how these different epistemological traditions can be integrated, we present four studies of air pollution regulation, natural resource management, and the spread of COVID-19. The studies show how integration can improve empirical estimates of causal effects, inform future research designs and data collection, enhance understanding of the complex dynamics that underlie observed temporal patterns, and elucidate causal mechanisms and the contexts in which they operate. These advances in causal understanding can help sustainability scientists develop better theories of phenomena where social and ecological processes are dynamically intertwined and prior causal knowledge and data are limited. The improved causal understanding also enhances governance by helping scientists and practitioners choose among potential interventions, decide when and how the timing of an intervention matters, and anticipate unexpected outcomes. Methodological integration, however, requires skills and efforts of all involved to learn how members of the respective other tradition think and analyze nature–society systems.
... On the other hand, in some papers, Population-driven productivity growth [33] may result in an upward movement along the environmental Kuznets curve(EKC) [34], especially if higher food demand leads to land clearing for agricultural expansion [35]. The resulting environmental damages may be highly concentrated around camp areas in the absence of sufficient transportation infrastructure [36]. But population growth does not always result in forest loss [37], as these processes will vary based on differences in country policy [38]. ...
After 2010, refugees through the World peaked at the highest level since WW II. Most of this increment was realized between 2011 and 2015 years in the effect of the Syrian conflict and the Arabic spring, and refugee problem that is an important problem for the world emerged. This problem was analyzed in the macroeconomic dimension, in the health dimension by different studies. However, the energy and environmental economy dimensions of this problem has not been adequately analyzed. This paper explored the cointegration and Granger causality between the refugee population, traditional energy consumption(firewood, charcoal, and coal), economic growth, environmental pollution, and deforestation by the tests of Fourier Bootstrapping ARDL (FBARDL) and Granger causality with the Fourier method in the period 1985-2020 in Ethiopia, Sudan, and Uganda. Firstly, whether the series is stationary was investigated by using Fourier unit root tests. Then, the FBARDL test determined the evidence of cointegration among the variables. Finally, by applying Granger causality with the Fourier method, the evidence of unidirectional causality running from the refugee population and traditional energy consumption to deforestation and evidence of unidirectional causality running from the refugee population and traditional energy consumption to environmental pollution were determined. The analysis results draw attention to the impacts of the increasing refugee population on deforestation, and environmental pollution. Governments must develop their long-term environmental policies in the context of the effects of refguee population on sustainability.
... For further raising impact, program eligibility rules were not conducive to prioritizing the enrollment of sites with the highest potential for avoiding deforestation. We might expect that incentives targeting poverty will sometimes but not always overlap sites facing deforestation risk, in which they might avoid deforestation (51)(52)(53). For BV, which most targeted settlements in Amazonia (with almost half of enrolled households), fortuitously sites containing many poor households often faced a moderate to high risk of being deforested. ...
Conservation incentives are increasing, globally, to support forests and the ecosystem services they provide (such as greenhouse-gas sequestration, species protection, and water quality). Paying forest managers to provide more ecosystem services to others can increase local acceptance of forest conservation, while also targeting local poverty. Emerging rigorous evidence shows that the impacts of incentives vary across contexts and scheme designs, from zero to high. On average, payments avoid modest deforestation via modest conditional transfers to poor rural households. We assess whether deforestation is avoided in sites where households enrolled in Bolsa Verde (or "Green Grant"), a Brazilian governmental conservation program implemented between 2011 and 2018 that targeted poor households in eligible protected areas and rural settlements. For settlements in Amazonia, we estimate that Bolsa Verde reduced deforestation by a total of 78,000 ha, implying 34 megatons fewer CO2 emissions over the program's duration (~the annual emissions of the city of São Paulo in 2015), at an average cost of USD 1.77 per avoided ton of CO2 (and with no evidence of a rebound in forest loss after the program). Monetizing emissions avoidance in settlements yields a value over three times the program cost in this region, even without considering any of the environmental or socioeconomic co-benefits. We find no evidence of avoided deforestation in other program sites-either settlements outside Amazonia or protected areas inside or outside Amazonia. Still, the value of the climate-mitigation benefits we document for settlements in Amazonia may well exceed the program's total cost.
... The results are similar to other studies looking for the impact of cash transfers on the use of environmental services (Alix- Garcia et al. 2013;Hanna and Oliva 2015;Nawaz and Iqbal 2021). As said in the previous chapter, cash transfers increase the target group's overall income and increase productive assets (Garcia and Cuartas 2021;Gertler et al. 2012). ...
This study examines the impact of cash support from the Benazir Income Support Program (BISP) on willingness to pay for environmental services (WTPfES) among the ultra-poor in Pakistan using a quasi-experimental approach. We conduct empirical analysis using cross-sectional data of 1200 households by applying the regression discontinuity design (RDD) approach. The RDD-based empirical results show that BISP cash support positively impacts the willingness to pay for environmental services such as drinking water, sanitation, and waste disposal management services. The empirical analysis further depicts that cash assistance has a positive and significant impact on the willingness to participate in environmental services at the household and community levels. In addition, the additional income from the BISP helps families achieve better living standards and improve environmental services. The use of environmental services ultimately leads to better health among the target groups. The government may expand unconditional cash support to increase the use of quality environmental services.
... Less clear-cut is how the changes in food consumption transformed local land use, as the food might have been produced elsewhere. Alix- Garcia et al. (2013) studied the relationship between income and changing land use in Mexico. The authors used a regression discontinuity (RD) design to compare deforestation in communities just poor enough to be eligible for Oportunidades and communities that just missed the cutoff. ...
... Although for poor populations of many regions, forest biomes act as a buffer against external shocks (Agarwal, 1991;Pattanayak and Sills, 2001;Wunder, 2001;Angelsen and Wunder, 2002;Baland and Francois, 2005;Tscharntke et al., 2012;Somorin et al., 2012;Noack et al., 2019), short-term economic opportunities may create incentives for forest degradation. Indeed, Baland et al. (2010) showed that poorer households in rural Nepal collect significantly less firewood than wealthier households in the same village, and likewise, in the context of poverty alleviation policies in Mexico and Gambia, recent robust evidence confirmed that positive income shocks lead to more environmental degradation and deforestation (Alix-Garcia et al., 2013;Heß et al., 2019). Furthermore, Assunção et al. (2019) showed that, in the Brazilian Amazon, enforcement of stricter requirements for rural credit concession led to lower deforestation, especially in the municipalities in which cattle ranching is a primary activity. ...
Land use changes are known to account for over 20% of human greenhouse gas emissions and tree cover losses can significantly influence land-climate dynamics. Land-climate feedbacks have been identified and evaluated for a long time. However, in addition to the direct effect of climate change on forest biomes, recent sparse evidence has shown that land use changes may increase as a result of weather shocks. In Western and Central Africa, agriculture is the main source of income and employment for rural populations. Economies rely on agricultural production, which is largely rainfed, and therefore dependent predominantly upon on seasonal rainfall. In this article, I explore the impact of seasonal rainfall quality on deforestation, by combining high-resolution remotely-sensed annual tree cover loss, land cover, human activity and daily rainfall data. I show that in poor regions that are mainly reliant on rainfed agriculture, a bad rainy season leads to large deforestation shocks. These shocks notably depend on the proportion of agricultural land and on the remoteness of the areas in question, as remoteness determines the ability to import food and the existence of alternative income sources. In areas with significant forest cover, a short rainfall season leads to a 15% increase in deforestation. In unconnected areas with small proportions of crop area, the increase in deforestation reaches 20%. Findings suggest that a refined understanding of the land use changes caused by rainfall shocks might be used to improve the design and effectiveness of development, adaptation and conservation policies.
... We also found women receiving Prospera were more likely to share in agricultural income, suggesting some effects on women's household bargaining position. These findings accord with research that associates CCTs with investments in the primary sector (Todd et al. 2010;Alix-García et al. 2013). But, to the extent Calakmuleños used Prospera to improve access to food (a stated program goal), they did so cognizant of the program's place in an economy that increasingly devalued their own food production (Olvera et al. 2017). ...
It has been almost two decades since conditional cash transfer programs first appeared on the agendas of multilateral agencies and politicians. Latin America has often been used as a testing ground for these programs, which consist of transfers of money to subsections of the population upon meeting certain conditions, such as sending their children to school or having them vaccinated. Money from the Government in Latin America takes a comparative view of the effects of this regular transfer of money, which comes with obligations, on rural communities.
Drawing on a variety of data, taken from different disciplinary perspectives, these chapters help to build an understanding of the place of conditional cash transfer programsin rural families and households, in individuals’ aspirations and visions, in communities’ relationships to urban areas, and in the overall character of these rural societies.
With case studies from Chile, Mexico, Peru, Brazil and Colombia, this book will interest scholars and researchers of Latin American anthropology, sociology, development, economics and politics.
... Such agricultural expansion is likely to generate other losses of natural vegetation associated with investment in ZH, including PRONAF driven deforestation in the Amazon and BF-led vegetation losses across most of Brazil (i.e., all biomes except the Caatinga). Notably cash-transfer programs focusing on poverty alleviation have been linked to deforestation elsewhere in the Neotropics because they promote the consumption of products that require large areas of land for their production (65). ...
Significance
Meeting SDGs requires assessing trade-offs and synergies across divergent goals and robust policy impact evaluation. Using quasi-experimental inference methods, we assess impacts of Brazil’s Zero Hunger (ZH) social protection programs. ZH investment increased per capita calorie and protein productions. Social impacts (multidimensional poverty, child malnutrition, and infant mortality) were more limited, and the direction of change in natural vegetation cover was biome specific. Conditional cash transfer (BF) generated fewer benefits and more trade-offs than agricultural support (PRONAF). Results inform policy development, including roll out of ZH inspired programs in sub-Saharan Africa. We highlight successful elements of social protection programs, synergies, and trade-offs between multiple SDGs including environmental protection.
... At lower income levels the relationships between income and forest destruction might be positive whereas at higher levels it becomes negative, as it was observed in Peru by Zwane (2007). (Alix-Garcia et al., 2010) Since better off households in the research area have also monetary motivations for product collection they might care less about forest health and exploit the resources. ...
Deforestation and biodiversity loss remain compelling policy concerns in Southeast
Asia, where the highest relative rate of deforestation of any major tropical region is evidenced. Notwithstanding Thailand’s logging ban in 1989, illegal logging and forest conversion have continued. Recently
the Royal Forest Department (RFD) transforms remaining forests into sites, classified as Protected Areas (PAs). About 20 years ago, Community Forestry (CF) was officially recognized in Thailand as a tool for sustainable forest management. Nevertheless, a proposed CF Bill has still not been approved. This case study was conducted to investigate the role of self-governance and restricted access to forest resources in the case of Karen Social-Ecological Systems in the uplands of Northern Thailand by describing the role that forest governance and access to natural resources play for the well-being of the rural people and the protection of the environment. Qualitative as well as quantitative methods will be used to obtain the aim of the study. We found that access to forest resources and degrees of self-governance as well as their interplay, are playing an important role for forest conservation and rural wellbeing. Thereby it is important to recognize CF as a central forest management option, as it is recently happening in Thailand to a certain extent. Self-governance of natural
forests can reduce user conflicts, tends to improve forest quality and maintain an adequate living standard. However, its success is depending on several factors such as degree of forest dependency, leadership, social capital, collective action, local ecological knowledge and good monitoring.
... The influx of cash generated by the PES component could also have an impact on participants and their forests, depending on how it is used (Dyer et al. 2012). For example, Alix-Garcia et al. (2013) show that a conditional cash transfer program (not a PES scheme) called "Opportunidades", implemented in Mexico, resulted in marginally higher deforestation rates in localities that received cash transfer payments due to increased local demand by participants for land-intensive goods like beef and milk. ...
We estimate the early effects of the pilot project to Reduce Emissions from Deforestation and forest Degradation (REDDþ) in the Brazilian Amazon. This project offers a mix of interventions, including conditional payments, to reduce deforestation by smallholders who depend on swidden agriculture and extensive cattle ranching. We collected original data from 181 individual farmers. We use difference-in-difference (DID) and DID-matching approaches and find evidence that supports our identification strategy. We estimate that an average of 4 ha of forest were saved on each participating farm in 2014, and that this conservation came at the expense of pastures rather than croplands. This amounts to a decrease in the deforestation rate of about 50%. We find no evidence of within-community spillovers. © The Author(s) 2018. Published by Oxford University Press on behalf of the Agricultural and Applied Economics Association.
... 12 On the other hand, a rise in income also increases the opportunity cost of time and thereby the costs of firewood collection for the household, which reduces firewood collections. Moreover, as incomes rise, the demand for land intensive consumption goods (Alix-Garcia et al., 2013), for cleaner and more practical energy sources (the "energy ladder" model) and awareness of the need for forest preservation and eco-system services may also increase. Falling household size and increases in out-migration can also reduce pressure on forests. ...
We investigate the relation between economic growth, household firewood collection, and forest conditions in Nepal between 2003 and 2010. Comovements in these are examined at the household and village levels, combining satellite imagery and household (Nepal Living Standard Measurement Survey) data. Projections of the impact of economic growth based on Engel curves turn out to be highly inaccurate: forest conditions remained stable despite considerable growth in household consumption and income. Firewood collections at the village level remained stable, as effects of demographic growth were offset by substantial reductions in per household collections. Households substituted firewood by alternative energy sources, particularly when livestock and farm-based occupations declined in importance. Engel curve specifications which include household productive assets (a proxy for occupational patterns) provide more accurate predictions. Hence structural changes accompanying economic growth play an important role in offsetting adverse environmental consequences of growth.
... In such cases, increased income from rural support programs is consistently associated with increased rates of deforestation at the regression level but not the study level (see, e.g., Klepeis and Vance (2003) for evidence on Mexico). Alix-Garcia et al. (2013) examined the randomized rollout of a rural support program in Mexico and found that increased income raised the consumption of land-intensive goods and increased deforestation, especially in more remote communities. ...
This article presents a meta-analysis of what drives deforestation and what stops it, based on a comprehensive database of 121 spatially explicit econometric studies of deforestation published in peer-reviewed academic journals from 1996 to 2013. We found that forests are more likely to be cleared in locations where the economic returns to agriculture are higher, due to either more favorable climatologic and topographic conditions or lower costs of clearing forests and transporting products to markets. Timber activity, land tenure security, community forest management, and community demographics are not consistently associated with either higher or lower deforestation. Population is consistently associated with greater deforestation and poverty is consistently associated with lower deforestation. However, in both cases it is difficult to infer a causal link because of endogeneity. Based on the results of the meta-analysis, we suggest promising approaches for stopping deforestation, including reducing the expansion of road networks into remote forested areas, targeting protected areas in regions where forests face a greater threat, and insulating the forest frontier from the demand for agricultural commodities. There is preliminary evidence that enforcing forest protection laws, supporting continued forest management by indigenous peoples, and payments for ecosystem services (PES) may also stop deforestation.
... Yet, policies which aim to conserve forests, such as protected areas, can also adversely affect the welfare of the forest-dependent poor, for instance, by restricting their access to natural resources (Barrett et al., 2011). Evidence is also emerging of how measures to improve welfare, such as anti-poverty programs, can induce environmental change, for example deforestation through increasing the local consumption and production of agricultural commodities (see Alix-Garcia et al., 2013). ...
... As the boundaries of localities are not mapped, we use the point locations (from INEGI) to create Thiessen polygons around each locality in order to assign locality areas. As illustrated in Figure 2, Thiessen polygons assign land to each locality based on the closest point and avoid the problem of double-counting (methodology follows Alix-Garcia et al. 2013). We use the 1995 locality polygons as the unit of analysis to maintain a constant area over time and calculate areaweighted means from similarly constructed Thiessen polygons based on point data from other years. ...
Protected areas (PAs) and payments for ecosystem services (PES) are the top two mechanisms available for countries to achieve international REDD agreements, yet there are few empirical comparisons of their effects. We estimate the impacts of PAs and PES on forest conservation, poverty reduction, and population change at the locality level in Mexico in the 2000 s. Both policies conserved forest, generating an approximately 20–25% reduction in expected forest cover loss. PES created statistically significant but small poverty alleviation while PAs had overall neutral impacts on livelihoods. Estimates by individual policy type for the same level of deforestation risk indicate that biosphere reserves and PES balanced conservation and livelihood goals better than strict protected areas or mixed-use areas. This suggests that both direct and incentive-based instruments can be effective, and that policies combining sustainable financing, flexible zoning, and recognition of local economic goals are more likely to achieve conservation without harming livelihoods.
... is associated with greater levels of deforestation ( Alix-Garcia et al., 2013), as it encourages the consumption of land-intensive goods and is, therefore, transforming forest areas. ...
... We estimate panel regressions with point level fixed effects on the matched subsample using the following specification: 19 We assign land area to each locality using the method of Thiessen polygons previously developed in Alix-Garcia, et al. (2013). Since locality points vary somewhat from year to year, we use the locations from 1995 (N=105,648) and calculate area weighted means of indicators using all available points from other years. ...
Environmental conditional cash transfers are popular but their impacts are not well understood. We evaluate land cover and wealth impacts of a federal program that pays landowners for protecting forest. Panel data for program beneficiaries and rejected applicants allow us to control for fixed differences and time trends affecting both groups. We find the program reduces the expected land cover loss by 40-51 percent and generates small but positive poverty alleviation. Environmental gains are higher where poverty is low while household gains are higher where deforestation risk is low, illustrating the difficulty of meeting multiple policy goals with one tool.
... increased income from rural support programs is consistently associated with increased rates of deforestation (-11|59|+34), as in Mexico (Klepeis and Vance 2003). A quasiexperimental study by Alix- Garcia et al (2013) found that increased income from a rural support program in Mexico raised the consumption of land-intensive goods and increased deforestation, especially in more remote communities. The association between rural income support and deforestation is sensitive to a variety of disaggregations. ...
We have constructed a comprehensive database of 117 spatially explicit econometric studies of deforestation published in peer-reviewed academic journals from 1996-2013. We present a meta-analysis of what drives deforestation and what stops it, based on the signs and significance of 5909 coefficients in 554 multivariate analyses. We find that forests are more likely to be cleared where economic returns to agriculture and pasture are higher, either due to more favorable climatological and topographic conditions, or due to lower costs of clearing forest and transporting products to market. Timber activity, land tenure security, and community demographics do not show a consistent association with either higher or lower deforestation. Population is consistently associated with greater deforestation, and poverty is consistently associated with lower deforestation, but in both cases endogeneity makes a causal link difficult to infer. Promising approaches for stopping deforestation include reducing the intrusion of road networks into remote forested areas; targeting protected areas to regions where forests face higher threat; tying rural income support to the maintenance of forest resources through payments for ecosystem services; and insulating the forest frontier from the price effects of demand for agricultural commodities.
... The situation is complex, however. For Oportunidades , Alix-Garcia found that transfers increased the probability of deforestation especially for cattle investment with distance from infrastructure (Alix-Garcia et al. 2013) (Table 2). Current social policy is virtually invisible in the deforestation literature, but it serves analytically as a proxy for thinking about other forms of domestic transfers: remittances, and other state welfare, retirement and transfer payments. ...
Forest dynamics in the Latin American tropics now take directions that no one would have predicted a decade ago. Deforestation in the Brazilian Amazon has dropped by over 80 percent, a pattern mimicked elsewhere in Amazonia, and is down by more than a third in Central America. Forest resurgence – increasing forest cover in inhabited landscapes or abandoned lands – is also expanding. In Latin America, woodland cover is increasing, at least for now, more than it is being lost. These dramatic shifts suggest quite profound and rapid transformations of agrarian worlds, and imply that previous models of understanding small-farmer dynamics merit significant review centering less on field agriculture and more on emergent forest regimes, and in many ways a new, increasingly globalized economic and policy landscape that emphasizes woodlands.This paper analyzes changing deforestation drivers and the implications of forest recovery and wooded landscapes emerging through social pressure, social policy, new government agencies, governance, institutions, ideologies, markets, migration and ‘neo-liberalization’ of nature. These changes include an expanded, but still constrained, arena for new social movements and civil society. These point to significant structural changes, changes in tropical natures, and require reframing of the ‘peasant question’ and the functions of rurality in the twenty-first century in light of forest dynamics.
... Spillovers are a central concern for two distinct reasons. First, a large literature indicates that schooling cash transfer programs can alter the welfare of non-beneficiaries due to congestion e↵ects in the classroom (Jere R Behrman, Piyali Sengupta and Petra Todd 2005), shifts in local norms around education (George A. Akerlof and Rachel E. Kranton 2002), income spillovers (Manuela Angelucci, Giacomo De Giorgi, Marcos A. Rangel and Imran Rasul 2010), or general equilibrium changes to prices (Jesse M. Cunha, Giacomo De Giorgi and Seema Jayachandran 2011) and production (Alix-Garcia et al. 2013). Second, and more specific to the Malawian context, cash transfers can decrease young women's dependence on men for financial assistance (Winford Masanjala 2007) and/or the need for 'transactional sex' (Michelle J. Poulin 2007;Ann Swindler and Susan Watkins 2007), thereby reducing the incidence of teen pregnancies and early marriages among program beneficiaries, but with ambiguous spillovers to non-beneficiaries in the same communities. ...
This paper formalizes the design of experiments intended specifically to study spillover effects. By first randomizing the intensity of treatment within clusters and then randomly assigning individual treatment conditional on this cluster-level intensity, a novel set of treatment effects can be identified. We develop a formal framework for consistent estimation of these effects, and provide explicit expressions for power calculations. We show that the power to detect average treatment effects declines precisely with the quantity that identifies the novel treatment effects. A demonstration of the technique is provided using a cash transfer program in Malawi.
... 25 Our road density indicator captures the extent of a district's market integration and may also reflect ease of access to environmental resources for those who have automotive transport. To the extent that markets are integrated and the effects of consumption expenditures on the environment are driven by demand for environment-related products (Foster and Rosenzweig, 2003; Alix-Garcia, et al., 2011), one may expect local expenditure effects (on environmental change) to be attenuated by market integration. However, ease of access may strengthen resource-depletion effects of higher consumption expenditures. ...
We study the relationships between rural income distributions and changes in environmental conditions in southern, western
and central India between 1994–95 and 2000–01. Other than the relatively rich, we find that all income strata benefit from
an improved environment, and intermediate expenditure households benefit more than the very poor in absolute terms. Higher
median consumption expenditures and “richness” are estimated to increase environmental decline, but we do not find a significant
impact of income poverty on local environmental health. The results do not support the “poverty trap” conjecture, with environmental
degradation driving expenditure reductions that promote offsetting aforestation (which benefits the poor).
This publication is one of a five-monograph series produced by the Inter-American Development Bank (IDB) to take stock of the lessons learned from impact evaluations of investments supported by the IDB Group for over a decade across a wide range of economic and social development sectors. As regional interest in mitigating and adapting to climate change continues to increase, there is an ever-growing demand to identify effective policies to (1) stem deforestation, (2) promote growth with sustainability, and (3) enhance the climate resilience of affected populations. This monograph summarizes the evidence from impact evaluations carried out by the IDB over the last decade on each of these three themes to identify policies and programs that work, enhance the use of rigorous evidence for decision-making, and ultimately improve the lives of the people of Latin America and the Caribbean.
Poverty eradication and environmental protection as the two global goals of sustainable development. China’s poverty alleviation policy attempts to achieve green development in poverty-stricken areas by eliminating poverty while also promoting environmental protection. Since the Poverty-stricken counties on the Qinghai-Tibet Plateau also have the dual attributes of ecological degradation and ecological fragility, it is of great significance to study the impact of poverty alleviation policy on their environment. In this research, taking poverty alleviation policy as the entry point, based on panel data and Remote Sensing Ecological Index for poverty-stricken counties on the Qinghai-Tibet Plateau from 2011 to 2019, and using the difference-in-differences (DID) method to verify the impact of policy on environmental quality. The main findings of the study were: 1) The poverty alleviation policy has a significant improvement effect on the ecological environment quality of counties in the Qinghai-Tibet Plateau region, and this conclusion still holds in a series of robustness tests using methods including the changing sample size method and the variable replacement method. Moreover, the policy effect has a certain time lag and its effect persists in the long term; 2) It is mainly due to the increased level of government public expenditure and the easing of government financial pressure that has contributed to the improvement of environmental quality in poverty-stricken areas; 3) Policy heterogeneity suggests that industrial poverty eradication policies are more conducive to promoting synergistic economic and environmental development in poverty-stricken areas.
Addressing poverty is an urgent global priority. Many of the world's poor and vulnerable people live in or near forests and rely on trees and other natural resources to support their livelihoods. Effectively tackling poverty and making progress toward the first of the United Nations 2030 Sustainable Development Goals to “end poverty in all its forms everywhere” must therefore consider forests and trees. But what do we know about the potential for forests and tree-based systems to contribute to poverty alleviation? This Special Issue responds to this question. It synthesises and presents available scientific evidence on the role of forests and tree-based systems in alleviating and, ultimately, eradicating poverty. The articles compiled here also develop new conceptual frameworks, identify research frontiers, and draw out specific recommendations for policy. The scope is global, although emphasis is placed on low- and middle-income countries where the majority of the world's poorest people live. This introductory article stakes out the conceptual, empirical and policy terrain relating to forests, trees and poverty and provides an overview of the contribution of the other seven articles in this collection. This Special Issue has direct implications for researchers, policymakers and other decision-makers related to the role of forests and tree-based systems in poverty alleviation. The included articles frame the relationships between forests, trees and poverty, identify research gaps and synthesize evidence to inform policy.
Does economic development have an unavoidable ecological cost? We examine the impacts on forest cover of one of India's signature place‐based economic policies involving massive tax benefits for new industrial and infrastructure development following the creation of the new state of Uttarakhand. Using a spatial difference‐in‐discontinuities design, we show that the policy, which explicitly excluded environmentally damaging industries, resulted in no meaningful change in local forest cover. Our results suggest that even in settings with low levels of enforcement, place‐based economic policies that deliver transformative economic expansion can be implemented with minimal ecological costs.
Forests and tree-based systems represent complex social-ecological systems. Gaining a better understanding of how contextual factors influence forest-poverty dynamics is essential for the design, targeting and implementation of policy instruments and interventions to alleviate poverty. In this chapter we explore key social, economic, political and environmental factors affecting forest-poverty dynamics, and use a series of illustrative examples to demonstrate how factors can take multiple roles in causal chains of processes of social and environmental change in forest and tree-based systems. We conclude the chapter by highlighting how future research can provide a better understanding of the processes and contexts shaping forest-poverty dynamics,
including elucidating the relative effects of different drivers of change on multiple social and environmental outcomes.
Industrial ecology (IE) research has well established expertise in accounting for the material stocks, flows, and associated impacts of industrial and consumer activities in a variety of scales and manifestations. As with many other science and social science fields, however, the pathways from IE research findings to policy and business decision‐making are often unclear and unsatisfactory. This issue creates a challenge for the application of industrial ecology to sustainable development. By reviewing several strands of literature, this article investigates alternative ways to generate and use research findings to support decision‐making and social change. It argues that advances in both the core and the emerging methods in IE complement each other to improve transparency and reliability of research evidence; extension and contextualization of current findings corresponding to different stages in policy‐making and organizational decision processes make research evidence more informative; a learning perspective makes research evidence valuable and used in more flexible ways. To better assist decision‐making for societal change, more dialogues between researchers of different methodological cultures and between researchers and other stakeholders and a paradigm shift in social systems for which industrial ecologists should be conscious and proactive are required.
Payments for ecosystem services (PES) programs have been increasingly studied with a policy mix perspective. So far, the focus has been on PES' interplay with other conservation instruments and resulting environmental outcomes at meso‐ and macrolevels. Though PES often operate among “poor” forest‐dwelling communities in the Global South, our knowledge on PES' interactions with poverty alleviation policies is scarce, especially at the microlevel. This article examines PES' interactions—in terms of joint coverage, management, and spending of revenues, and socioeconomic effects of participation—with a conditional cash transfer (CCT) program in a case study of six communities in Selva Lacandona, Chiapas, Mexico. The article builds a dual framework combining policy mix analysis with an actor‐oriented approach focused on participants' microagency, and is based on in‐depth, qualitative research. Results reveal widespread joint PES and CCT coverage, and patterns of specialization between different household members regarding the management and spending of program revenues. Results also show positive, multilevel policy interactions as participants combine resources to pursue individual and collective socioeconomic strategies. The article highlights the creative ways in which local stakeholders integrate individual policies within their broader livelihoods, and how coordination failures among policy‐implementing institutions and deficient public services limit participants' ability to achieve sustained livelihood improvements. The article also highlights how a focus on microlevel policy interactions complements meso‐ and macrolevel analyses for a better understanding of PES' role in a policy mix and concludes by providing some recommendations for building implementation synergies and improving program design.
Despite calls for greater use of randomized control trials (RCTs) to evaluate the impact of conservation interventions; such experimental evaluations remain extremely rare. Payments for environmental services (PES) are widely used to slow tropical deforestation but there is widespread recognition of the need for better evidence of effectiveness. A Bolivian nongovernmental organization took the unusual step of randomizing the communities where its conservation incentive program (Watershared) was offered. We explore the impact of the program on deforestation over 5 years by applying generalized additive models to Global Forest Change (GFC) data. The “intention‐to‐treat” model (where units are analyzed as randomized regardless of whether the intervention was delivered as planned) shows no effect; deforestation did not differ between the control and treatment communities. However, uptake of the intervention varied across communities so we also explored whether higher uptake might reduce deforestation. We found evidence of a small effect at high uptake but the result should be treated with caution. RCTs will not always be appropriate for evaluating conservation interventions due to ethical and practical considerations. Despite these challenges, randomization can improve causal inference and deserves more attention from those interested in improving the evidence base for conservation. We found no evidence of an impact of the intervention on deforestation when treatment and control communities are compared. However taking account of the variable uptake of the intervention provides some evidence of a small effect of the intervention where higher uptake has been achieved.
Despite calls for greater use of randomized control trials (RCTs) to evaluate the impact of conservation interventions; such experimental evaluations remain extremely rare. Payments for environmental services (PES) are widely used to slow tropical deforestation but there is widespread recognition of the need for better evidence of effectiveness. A Bolivian nongovernmental organization took the unusual step of randomizing the communities where its conservation incentive program (Watershared) was offered. We explore the impact of the program on deforestation over 5 years by applying generalized additive models to Global Forest Change (GFC) data. The “intention‐to‐treat” model (where units are analyzed as randomized regardless of whether the intervention was delivered as planned) shows no effect; deforestation did not differ between the control and treatment communities. However, uptake of the intervention varied across communities so we also explored whether higher uptake might reduce deforestation. We found evidence of a small effect at high uptake but the result should be treated with caution. RCTs will not always be appropriate for evaluating conservation interventions due to ethical and practical considerations. Despite these challenges, randomization can improve causal inference and deserves more attention from those interested in improving the evidence base for conservation.
In response to the United Nations Sustainable Development Goals, there has been a rising awareness of the need to address simultaneously the preservation of natural capital stocks and poverty alleviation at multiple scales. Focusing on tropical forest-rich developing countries, the article overviews the extent to which natural capital considerations are integrated into existing development policies and interventions. The review finds that the explicit consideration of natural resources is left out of many commonly applied development interventions, leading to suboptimal and unsustainable outcomes. The interventions that do tackle both development and conservation goals are often not coordinated and are implemented at a site-by-site basis, without providing the socially efficient levels of natural capital stocks or ensuring the long-term sustainability of the development and conservation impacts. Bringing in perspectives from development economics, environmental economics, and applied conservation, this article makes the case for a better integration of development and conservation goals in interventions in developing countries and outlines the emerging frontiers for research and policy.
Household biogas systems are a renewable energy technology with the potential to provide sustainable development benefits by reducing pressure on forest stocks and by shifting household time allocation towards higher value activities or long-term investments in human capital. We estimate the environmental and socioeconomic impacts of biogas expansion in Nepal using an instrumental variables approach that exploits conditional variation in access to biogas installation companies. We confirm prior evidence that biogas use significantly reduces collected fuelwood, estimating changes of approximately 800-2000 kg per year per household. We find new evidence that biogas saves time in fuelwood collection (23-47%), and results in reallocation of time away from home production and wage labor towards agricultural labor and education. We find that biogas reduced forest cover loss in the Hill region and when combined with other forest protection policies. Together the results suggest that biogas can contribute modestly to sustainable development, particularly in combination with complimentary opportunities or policies.
Highlights:
Poverty (lack of wellbeing) has at least five dimensions that relate to ecosystem services ● Qualitative poverty concepts, beyond income metrics and understood in local context, are key to pro-poor PES designs ● PES financial transfers can directly reduce poverty under specific circumstances ● Co-investment in stewardship as a PES paradigm can accommodate all dimensions of rural poverty ● A decision tree is provided to identify whether PES or PES-related approaches can reduce poverty in a local context
This evidence gap map examines the high-quality evidence available in the area of forest conservation in low-and middle-income countries. Our clearest finding is that there a paucity of high-quality evidence in areas significant for policy such as the effect of forest-related climate change policies, trade laws and management, or education and awareness campaigns on environmental and social outcomes in forests.
Most evaluations of payments for environmental services programs focus on immediate environmental impacts, and do not measure the effects on socioeconomic outcomes or on other land use activities (leakage). Efficient allocation of land use contracts, through auctions for example, may help mitigate concerns about adverse livelihood or leakage effects. This study reports on a field experiment that varied the allocation of afforestation contracts to smallholder farmers in Malawi. Households were randomly assigned to participate in an auction or in a lottery for the contracts, which provided three years of payment based on tree survival outcomes. Households that did not receive a contract as a result of the lottery form a pure comparison group. The results show evidence for within-farm leakage for households that received a contract at random, in the form of additional land clearing. Randomly contracted households are also more likely to report household labor shortages. These effects are mitigated to some degree when contracts are assigned through an auction. Together, the results point to leakage and livelihood impacts from payments for environmental services that are often overlooked in standard evaluations, but which may be reduced through improvements in contract targeting.
Policies that target poverty reduction are often at odds with environmental sustainability. Assessing magnitudes of trade-offs between improved livelihoods on one side, and forest cover on the other, is important for designing win-win development policies that may help to mitigate climate change. I use a mix of panel data for 670 villages over a 10 year period, and combine it with historical land records and grey literature, to understand the drivers of deforestation within reserved forests of Thailand – an area where smallholder ethnic tribes are located. Given that reserved forests are the last bastions of forests in Thailand, examining what drives land clearing within these areas is important. I combine econometric findings with qualitative reports to infer that (i) it is important to measure the differential effects of policies on different crops, agricultural intensity and the agricultural frontier; and (ii) within forest reserves, policies that encourage cultivation overall may not be detrimental to forest cover after all. This has important implications for evaluators and policy makers.
The environmental Kuznets curve posits an inverted-U relationship between pollution and economic development. Pessimistic critics of empirically estimated curves have argued that their declining portions are illusory, either because they are cross-sectional snapshots that mask a long-run "race to the bottom" in environmental standards, or because industrial societies will continually produce new pollutants as the old ones are controlled. However, recent evidence has fostered an optimistic view by suggesting that the curve is actually flattening and shifting to the left. The driving forces appear to be economic liberalization, clean technology diffusion, and new approaches to pollution regulation in developing countries.
Inspired by the success of evidence-based medicine, environmental scholars and practitioners have grown enthusiastic about applying a similar evidence-based approach to solve some of the world's most pressing environmental problems. An important component of the evidence-based movement is the empirical evaluation of program and policy impacts. Impact evaluations draw heavily from recent advances in the empirical study of causal relationships - the effect of one thing on another. This review highlights the key components of these advances and characterizes the way in which they contribute to better evaluations of the environmental and social impacts of environmental programs. The review emphasizes that a solid understanding of these advances is required before environmental scholars and practitioners can begin to collect the relevant data, analyze them within credible research designs, and generate reliable evidence about the effectiveness of the myriad proposed solutions to the world's environmental and social problems.
Environmental quality in many developing countries is poor and generates substantial health and productivity costs. However, the few existing measures of marginal willingness to pay (MWTP) for environmental quality improvements indicate low valuations by affected households. This paper argues that this seeming paradox is the central puzzle at the intersection of environmental and development economics: Given poor environmental quality and high health burdens in developing countries, why is MWTP seemingly so low? We develop a conceptual framework for understanding this puzzle and propose four potential explanations for why environmental quality is so poor: (1) due to low income levels, individuals value increases in income more than marginal improvements in environmental quality; (2) the marginal costs of environmental quality improvements are high; (3) political economy factors undermine efficient policymaking; and (4) market failures such as weak property rights and missing capital markets distort MWTP for environmental quality. We review the literature on each explanation and discuss how the framework applies to climate change, which is perhaps the most important issue at the intersection of environment and development economics. The paper concludes with a list of promising and unanswered research questions for the emerging sub-field of “envirodevonomics.”
This paper develops a nested land use model for the Democratic Republic of the Congo (DRC). The model is capable of systematically representing broad land covers and allocating agricultural area to the country relevant crops. We apply the model to assess the potential environmental impacts of road development in the country. Results indicate that an ongoing plan for road network expansion in the country would cause a reduction of more than 2 % in the existing forest resources, an increase of about 16 % in the current agricultural land, and a total loss of carbon stock estimated to be 316 TgC. The DRC government should consider forest protection a priority as road development is promoted. A plan for agricultural intensification could be safely pursued if coupled with necessary resources to prevent deforestation.
Reducing emissions from deforestation and forest degradation (REDD+) involves global and national policy measures as well as effective action at the landscape scale across productive sectors. Multilevel governance (MLG) characterizes policy processes and regimes of cross-scale and cross-sector participation by multiple public and private actors for improved legitimacy and effectiveness of policy. We examine multilevel, multi-actor engagement in REDD+ planning in Quintana Roo, Mexico, to find out how local perspectives align with the national policy approach to REDD+ as an integrating element of holistic rural development at territorial scale, and how current practices support procedurally legitimate MLG required to implement it. We find that there is wide conceptual agreement on the proposed approach by a variety of involved actors, in rejection of the business-as-usual sectoral interventions. Its implementation, however, is challenged by gaps in horizontal and vertical integration due to strong sectoral identities and hierarchies, and de facto centralization of power at the federal level. Continued participation of multiple government and civil society actors to contribute to social learning for locally appropriate REDD+ actions is likely to require a more balanced distribution of resources and influence across levels. Meaningfully engaging and ensuring the representation of local community interests in the process remains a critical challenge.
This paper evaluates the impact of access to groundwater on poverty using data from rural India. The estimation exploits the fact that the technology required to access groundwater changes exogenously due to constraints imposed by laws of physics at a depth of eight meters. I find that rural poverty in areas where depth from surface is below the cutoff is 9 to 10 percent higher. Using survey data for a subsample of villages, I also show that disputes over irrigation water increase by 25 percent around the cutoff. Historical endowments of groundwater facilitate adoption of yield enhancing technologies over the longrun.
This paper proposes a new method for estimating heterogeneous externalities in policy analysis when social interactions take the linear-in-means form. We establish that the parameters of interest can be identified using specific functions of the share of the eligible population. We also show that the parameters can be consistently estimated, and we study the finite sample performance of the proposed estimators using Monte Carlo simulations. The method is illustrated using data on the PROGRESA program. We .find that more than 50% of the effects of the program on schooling attendance are due to externalities, which are heterogeneous within and between poor and nonpoor households.
In a previous study, simulations of agricultural production potentials were made for different exploratory scenarios considering population growth, type of diet and low and high input agriculture. Results indicated that future world populations can be fed, but problems are likely in South Asia. The simulations involved gross generalizations for soil conditions. For example, possible effects of soil degradation were not expressed. The current study was made to explore the effects of the different types of soil degradation on agricultural production, using major soil groupings of the Humid Tropics and Seasonally Dry (Sub)Tropics as examples. Degradation (compaction, erosion and acidification) is expressed in terms of soil quality indicators relating potential to actual production. Results are characteristically different for different soil units (genoforms), and the suggestion is made to present such differences in future soil databases for phenoforms that express effects of different forms of degradation or improvement, allowing better assessments for exploratory land use scenarios. Field studies should be initiated to describe realistic phenoforms for any given genoform.
This paper uses panel analyses to estimate relationships for agricultural planted area and beef cattle numbers at the state level in Mexico during the periods 1970-85, in order to determine the main factors affecting forest land conversion. Of the key policy variables, maize and fertilizer prices appear to be the main influences on the expansion of planted area, whereas beef prices and credit disbursement influence cattle numbers. Population growth also affects both livestock and agricultural activities, and income per capita is positively correlated with cattle expansion. These estimated relationships are used to examine the effects both of agricultural and livestock sectoral policy changes and of trade liberalization in Mexico resulting from the North American Free Trade Agreement (NAFTA). To avoid any unintended impacts of NAFTA on Deforestation, it may be necessary for Mexico to make complementary investments in Land improvements, especially for existing cultivation on rain fed land.
Vast amounts of land are required for the production of food, but the area suitable for growing crops is limited. In this paper, attention is paid to the relationship between food consumption patterns and agricultural land requirements. Land requirements per food item that were determined in a previous study are combined with data on the per capita food consumption of various food packages, varying from subsistence to affluent, leading to information on land requirements for food. Large differences could be shown in per capita food consumption and related land requirements, while food consumption, expenditure, and the physical consumption of specific foods change rapidly over time. A difference of a factor of two was found between the requirements for existing European food patterns, while the land requirement for a hypothetical diet based on wheat was six times less than that for an existing affluent diet with meat. It is argued that in the near future changes in consumption patterns rather than population growth will form the most important variable for total land requirements for food. Trends towards the consumption of foods associated with affluent lifestyles will bring with them a need for more land. Lifestyle changes, changes in consumer behavior on a household level, can be considered as powerful options to reduce the use of natural resources such as agricultural land.
This paper explores the “state-of-the-art” of the two-way causal links between poverty alleviation and natural tropical forests. Microimpacts of rising poverty can increase or slow forest loss. At the macrolevel, poverty also has an ambiguous effect, but it is probable that higher income stimulates forest loss by raising demand for agricultural land. The second question is what potential forest-led development has to alleviate a country's poverty, in terms of producer benefits, consumer benefits and economy-wide employment. Natural forests widely serve as “safety nets” for the rural poor, but it proves difficult to raise producer benefits significantly. Urban consumer benefits from forest, an important target for pro-poor agricultural innovation, are limited and seldom favor the poor. Absorption of (poor) unskilled labor is low in forestry, which tends to be capital-intensive. Natural forests may thus lack comparative advantage for poverty alleviation. There are few “win–win” synergies between natural forests and national poverty reduction, which may help to explain why the loss of tropical forests is ongoing. This may have important implications for our understanding of “sustainable forest development” and for the design of both conservation and poverty-alleviation strategies.
This article examines the determinants of activity choice affecting forest use among low-income households in Malawi. Data from three villages are used to estimate a system of household labor share equations for maize production, forest employment, and non-forest employment. A system estimation approach is used to identify factors influencing the competing and synergistic livelihood strategies which households undertake at the forest margin. Results from constrained maximum likelihood estimation indicate heightened incentives to degrade forests when returns to forest use are high. Factors reducing forest pressure include favorable returns to non-forest employment, secondary education of the household head, and wealth.
We investigate determinants of household firewood collection in rural Nepal, using 1995-96 and 2002-3 World Bank Living Standards Measurement Survey (LSMS) data. We incorporate village fixed effects, endogenous censoring, measurement error in living standards and heterogeneous effects of different household assets. We find no evidence in favor of the poverty-environment hypothesis. The evidence for the environmental Kuznets curve depends on the precise measure of living standards and time period studied. Firewood collections fall with a transition to modern occupations and rise with increasing population and household division. The local interhousehold collection externality is negligible, indicating that policy interventions are justified only by ecological considerations or nonlocal spillovers.
Abstract in HTML and technical report in HTML and PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change website (http://mit.edu/globalchange/www/). Includes bibliographical references. This paper analyzes the determinants of deforestation in the Brazilian Amazon. From a model of optimal land use, it derives and then estimates a deforestation equation on country-level data for the period 1978 to 1988. The data include a deforestation measure from satellite images, which is a great advance in that it allows improved within-country analysis. Evidence exists that: increased road density in a country leads to more deforestation in that country and in neighboring countries; government-subsidized development projects increase deforestation; greater distance from markets south of the Amazon leads to less deforestation; and better soil quality leads to more deforestation. The results for government provision of credit are mixed across specifications. The population density, although the primary explanatory variable in most previous empirical work, does not have a significant effect when all the variables motivated within the model are included. However, a quadratic specification yields a more robust population result: the first few people entering an empty country have significantly more impact than the same number of people added to a densely populated country. This result suggests the importance of the spatial distribution of population.
In this article we used data from the Mexican poverty alleviation program called PROGRESA (Programa de Educacion, Salud y Alimentacion) to examine whether eligibility for a cash transfer provided by the program conditional on children's regular school attendance and regular visits to health centers is also associated with increased consumption of food. We used a longitudinal sample of approximately 24,000 households from 506 communities. A distinguishing characteristic of this sample was that some of the communities were randomly selected for participation in PROGRESA, while the rest were introduced into the program at later phases. Exploiting this feature in our analysis, we found that eligible households in the villages covered by PROGRESA increased caloric acquisition compared with eligible households not receiving these benefits. By November 1999, median beneficiary households in treatment localities obtained 6.4% more calories than did comparable households in control localities. Perhaps even more significant, we found that the impact was greatest on dietary quality as measured by the acquisition of calories from vegetable and animal products--a finding consistent with the view of respondents themselves that PROGRESA was enabling them to "eat better."
The authors test whether poor households use cash transfers to invest in income generating activities that they otherwise would not have been able to do. Using data from a controlled randomized experiment, they find that transfers from the Oportunidades program to households in rural Mexico resulted in increased investment in micro-enterprise and agricultural activities. For each peso transferred, beneficiary households used 88 cents to purchase consumption goods and services, and invested the rest. The investments improved the household's ability to generate income with an estimated rate of return of 17.55 percent, suggesting that these households were both liquidity and credit constrained. By investing transfers to raise income, beneficiary households were able to increase their consumption by 34 percent after five and a half years in the program. The results suggest that cash transfers to the poor may raise long-term living standards, which are maintained after program benefits end.
PIP
Concern is rising over the deleterious effects of tropical deforestation. For example, the loss of forest cover influences the climate and reduces biodiversity, while reduced timber supplies, siltation, flooding, and soil degradation affect economic activity and threaten the livelihoods and cultural integrity of forest-dependent people. Such concerns have led economists to expand their efforts to model why, where, and to what extent forests are being converted to other land uses. This synthesis of the results of more than 140 economic models analyzing the causes of tropical deforestation brings into question many conventional hypotheses upon deforestation. More roads, higher agricultural prices, lower wages, and a shortage of off-farm employment generally lead to more deforestation. However, it is not known how technical change, agricultural input prices, household income levels, and tenure security affect deforestation. The role of macroeconomic factors such as population growth, poverty reduction, national income, economic growth, and foreign debt is also unclear. The authors nonetheless determine through their review that policy reforms included in current economic liberalization and adjustment efforts may increase pressure upon forests.
This paper provides a theoretical explanation for the widely debatedempirical finding of “Environmental Kuznets Curves”, i.e., U-shaped relationships between per-capita income and indicators of environmentalquality. We present a household-production model in which the degradationof environmental quality is a by-product of household activities. Householdscan not directly purchase environmental quality, but can reduce degradation by substituting more expensive cleaner inputs to production for less costlydirty inputs. If environmental quality is a normal good, one expectssubstitution towards the less polluting inputs, so that increases in incomewill increase the quality of the environment. It is shown that this onlyholds for middle income households. Poorer households spend all income on dirty inputs. When they buy more, as income rises, the pollution also rises.they do not want to substitute, as this would reduce consumption ofnon-environmental services for environmental amenities that are alreadyabundant. Thus, as income rises from low to middle levels, a U shape can result. Yet an N shape might eventually result, as richer households spend all income on clean inputs. Further substitution possibilities are exhausted.Thus as income rises again pollution rises and environmental quality falls. Copyright Kluwer Academic Publishers 2004
"This document synthesizes the findings contained in a series of reports prepared by IFPRI for PROGRESA between November 1998 and November 2000... PROGRESA is one of the major programs of the Mexican government aimed at developing the human capital of poor households. Targeting its benefits directly to the population in extreme poverty in rural areas, PROGRESA aims to alleviate current and future poverty levels through cash transfers to mothers in households.... One of the most important contributions of IFPRI's evaluation of PROGRESA has been the continuation of the program in spite of the historic change in the government of Mexico in the 2000 elections. The overwhelming (and unprecedented) evidence that a poverty alleviation program shows strong signs of having a significant impact on the welfare and human capital investment of poor rural families in Mexico has contributed to the decision of the Fox administration to continue with the program and to expand its coverage in the poor urban areas of the country after some improvements in the design of the program.... The majority of the improvements in the design of PROGRESA (renamed Oportunidades by the Fox administration) were based on findings of the evaluation of PROGRESA that revealed areas of needed improvements in some of the structural components and the operation of the program... Yet in spite of these improvements in the program, the evaluation findings suggest that some issues remain to be resolved." from Text
" This paper as exemplified by the Millennium Declaration of the United Nations, the reduction of poverty and hunger are now seen as central objectives of international development. Yet the modalities for attaining these goals are contested. Further, while it might be assumed that interventions that alleviate poverty will automatically reduce hunger, a number of studies of the relationship between income and the acquisition of food suggest that this assumption may be incorrect. There are sharply divergent views as to how much narrowly targeted interventions actually benefit the poor. These result from differing assessments of three issues: whether better targeting outcomes are likely to be achieved, whether such methods are cost-effective, and whether the living standards of the poor are improved by such targeted interventions. This paper contributes to this debate through an analysis of a Mexican antipoverty program called PROGRESA (the Programa de Educación, Salud y Alimentación). PROGRESA provides cash transfers linked to children's enrollment and regular school attendance and to clinic attendance. By 2000, it reached approximately 2.6 million families, about 40 percent of all rural families and about one-ninth of all families in Mexico. We use a longitudinal sample of approximately 24,000 households from 506 communities.... We find that the impact is greatest on dietary quality as measured by the acquisition of calories from vegetable and animal products a finding consistent with the view of respondents themselves that PROGRESA was enabling them to to eat better" from Authors' Abstract.
Although forests have diminished globally over the past 400 years, forest cover has increased in some areas, including India in the last two decades. Aggregate time-series evidence on forest growth rates and income growth across countries and within India and a newly assembled data set that combines national household survey data, census data, and satellite images of land use in rural India at the village level over a 29-year period are used to explore the hypothesis that increases in the demand for forest products associated with income and population growth lead to forest growth. The evidence is consistent with this hypothesis, which also shows that neither the expansion of agricultural productivity nor rising wages in India increased local forest cover.
This paper provides a survey of 'first wave' economic studies of tropical deforestation and land use. These studies of tropical forest land conversion are generally at the cross-country level. We also conduct a synthesis cross-country analysis of tropical agricultural land expansion. The results show that agricultural development is the main factor determining land expansion, but institutional factors have an important influence. Income effects tend to vary from region to region, and do not always display an 'Environmental Kuznets Curve' relationship. This paper also provides a review of the more recent 'second wave' economic studies of tropical deforestation that model and analyze the economic behaviour of agricultural households, timber concessionaires and other agents within tropical forest countries who affect deforestation through their land use decisions. Further work in this area requires more country-level and local case studies into tropical deforestation and land use.
The environmental Kuznets curve posits an inverted-U relationship between pollution and economic development. Pessimistic critics of empirically estimated curves have argued that their declining portions are illusory, either because they are cross-sectional snapshots that mask a long-run "race to the bottom" in environmental standards, or because industrial societies will continually produce new pollutants as the old ones are controlled. However, recent evidence has fostered an optimistic view by suggesting that the curve is actually flattening and shifting to the left. The driving forces appear to be economic liberalization, clean technology diffusion, and new approaches to pollution regulation in developing countries.
We examine the reduced-form relationship between per capita income and various environmental indicators. Our study covers
four types of indicators: urban air pollution, the state of the oxygen regime in river basins, fecal contamination of river
basins, and contamination of river basins by heavy metals. We find no evidence that environmental quality deteriorates steadily
with economic growth. Rather, for most indicators, economic growth brings an initial phase of deterioration followed by a
subsequent phase of improvement. The turning points for the different pollutants vary, but in most cases they come before
a country reaches a per capita income of $8000.
The concept of the forest transition or forest-area transition is discussed in terms of the change from decreasing to expanding forest areas that has taken place in many developed countries. Similarities between historical deforestation in now-developed countries and current deforestation in developing countries are outlined. The question of why and how the forest transition takes place is posed, and some preliminary discussion of the variables that may influence it is presented. Prospects for a forest transition in the tropical world and the world as a whole are considered. -Author
The general reluctance of policy makers to include forests in discussions about global warming has changed with the development of measures to Reduce Emissions from Deforestation and Degradation (REDD). Mesoamerica presents a logical starting point to promote REDD due to the extent
of its forest, and the relatively advanced state of its forest management institutions and policies. This paper reviews the prospects for REDD in Mesoamerica using PES and other instruments, with emphasis on the effectiveness of REDD measures at reducing emissions, and their efficiency and
fairness. It concludes that in spite of reduced deforestation in the region, the growth of payments to avoid deforestation will be the most important policy change related to REDD in the region in the coming years. However, the magnitude and impact of any payments must not be exaggerated and
should be set in context of the overall trends resulting from broader social and economic dynamics.
This paper provides a theoretical explanation for the widely debated empirical finding of “Environmental Kuznets Curves”, i.e., U-shaped relationships between per-capita income and indicators of environmental,quality. We present a household-production model in which the degrad- ation of environmental,quality is a by-product of household activities. Households can not directly purchase environmental quality, but can reduce degradation by substituting more expensive cleaner inputs to production for less costly dirty inputs. If environmental quality is a normal good, one expects substitution towards the less polluting inputs, so that increases in income will increase the quality of the environment. It is shown,that this only holds for middle income,households. Poorer households spend all income on dirty inputs. When they buy more, as income rises, the pollution also rises. they do not want to substitute, as this would reduce consumption of non-environmental services for environmental amenities that are already abundant. Thus, as income rises from low to middle levels, a U shape can result. Yet an N shape might eventually result, as richer households spend all income,on clean inputs. Further substitution possibilities are exhausted. Thus as income rises again pollution rises and environmental,quality falls. Key words: development, environment, growth, substitution JEL classification: D11, D13, O12, Q25, Q42
Using case studies and concepts we suggest that constraints upon aggregate or global forest transition are significantly more severe than those upon local forest reversals. The basic reason is that one region's reversal can be facilitated by other regions that supply resources and goods, reducing the demands upon the region where forests rise. Many past forest reversals involve such interdependence. For ‘facilitating regions’ also to rise in forest requires other changes, since they will not be receiving such help. We start by discussing forest-transitions analysis within the context of Environmental Kuznets Curves (EKCs), for a useful typology of possible shifts underlying transitions. We then consider the historical Northeast US where a regional reversal was dramatic and impressive. Yet this depended upon agricultural price shocks, due to the Midwest US supplying food, and also upon the availability of timber from other US regions. Next we consider deforestation in Amazônia, whose history (like the Northeast US) suggests a potential local role for urbanization, i.e. spatial concentration of population. Yet inter-regional issues again are crucial. For cattle and soy, expansion of global demands may give to Amazonia a role more like the Midwest than the Northeast US. In addition, across-region interdependencies will help determine where reversal and facilitation occur. Finally we discuss the constraints upon very broad forest transition.
How large are the benefits of transportation infrastructure projects, and what explains these benefits? To shed new light on these questions, this paper uses archival data from colonial India to investigate the impact of India's vast railroad network. Guided by four predictions from a general equilibrium trade model, I find that railroads: (1) decreased trade costs and interregional price gaps; (2) increased interregional and international trade; (3) increased real income levels; and (4), that a sufficient statistic for the effect of railroads on welfare in the model (an effect that is purely due to newly exploited gains from trade) accounts for virtually all of the observed reduced-form impact of railroads on real income in the data. I find no spurious effects from over 40,000 km of lines that were approved but - for four different reasons - were never built.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
Abstract Environmental social scientists have recently begun to use the term 'forest transition' to describe how forest cover changes as economic development occurs in nations. The hypothesized transition occurs as follows. An initial surge in economic activity in impoverished societies spurs deforestation, but as economic activity continues to intensify and cities grow larger, a 'turnaround' occurs, and deforestation gives way to reforestation. This paper uses cross-national data from five successive surveys of world forest resources to assess this empirical claim. A turnaround in forest cover trends does occur in a significant number of nations. The paper also evaluates two explanations for the turnaround, a wood scarcity hypothesis derived from microeconomic theory and an industrialization hypothesis linked to central place theory. It finds period specific support for the industrialization hypothesis. The paper concludes with a brief discussion of the implications of these findings for proposals to alleviate the biodiversity crisis through programs of reforestation.
This paper examines the spatial patterns of unemployment in Chicago between 1980 and 1990. We study unemployment clustering with respect to different social and economic distance metrics that reflect the structure of agents' social networks. Specifically, we use physical distance, travel time, and differences in ethnic and occupational distribution between locations. Our goal is to determine whether our estimates of spatial dependence are consistent with models in which agents' employment status is affected by information exchanged locally within their social networks. We present non-parametric estimates of correlation across Census tracts as a function of each distance metric as well as pairs of metrics, both for unemployment rate itself and after conditioning on a set of tract characteristics. Our results indicate that there is a strong positive and statistically significant degree of spatial dependence in the distribution of raw unemployment rates, for all our metrics. However, once we condition on a set of covariates, most of the spatial autocorrelation is eliminated, with the exception of physical and occupational distance. Racial and ethnic composition variables are the single most important factor in explaining the observed correlation patterns. Copyright © 2002 John Wiley & Sons, Ltd.
Expanding credit access is a key ingredient of development strategies worldwide. Microfinance practitioners, policymakers, and donors have ambitious goals for expanding access, and seek efficient methods for implementing and evaluating expansion. There is less consensus on the role of consumer credit in expansion initiatives. Some microfinance institutions are moving beyond entrepreneurial credit and offering consumer loans. But many practitioners and policymakers are skeptical about unproductive lending. These concerns are fueled by academic work highlighting behavioural biases that may induce consumers to overborrow. We estimate the impacts of a consumer credit supply expansion using a field experiment and follow-up data collection. A South African lender relaxed its risk assessment criteria by randomly approving some marginal applications it normally would have rejected. We estimate the resulting impacts using new survey data on borrower behaviour and well-being, and administrative data on loan repayment. We find that the marginal loans produced measurable benefits in the form of increased employment, reduced hunger, and reduced poverty. The marginal loans also appear to have been profitable for the lender. The results must be interpreted with caution but suggest that consumer credit expansions can be welfare-improving.
Conditional cash transfer programs seek to break the intergenerational transmission of poverty by building the human capital of poor children. Despite their popularity throughout the developing world, relatively little is known about their effect on children's health outcomes. This paper evaluates the impact of the Mexican conditional cash transfer program, Progresa, on two important health outcomes: infant and neonatal mortality. It exploits the phasing-in of Progresa over time throughout rural Mexico to identify the impact of the program. The paper shows that Progresa led to a large 17% decline in rural infant mortality among the treated, but did not reduce neonatal mortality on average. The benefit–cost ratio is between 1.3 and 3.6. Tests for heterogeneity show larger declines for some groups including those municipalities whose pre-program levels of mortality were above the median, and those that prior to the program had higher illiteracy rates, and less access to electricity.
This paper examines the relationship between income and land clearing for households living in tropical forest regions. A simple model of the agricultural household that clears land for agriculture is developed to investigate the relationship between lagged income and cleared land holdings. Analysis of panel data from Peru suggests that lagged income is positively correlated with clearing, though at a decreasing rate, and, because of labor market constraints, clearing is positively correlated with household labor availability. This work suggests that small increases in the incomes of the poorest are unlikely to reduce deforestation in this context.
This paper evaluates how the Progresa program, which provides poor mothers in rural Mexico with education grants, has affected enrollment. Poor children who reside in communities randomly selected to participate in the initial phase of the Progresa are compared to those who reside in other (control) communities. Pre-program comparisons check the randomized design, and double-difference estimators of the program's effect on the treated are calculated by grade and sex. Probit models are also estimated for the probability that a child is enrolled, controlling for additional characteristics of the child, their parents, local schools, and community, and for sample attrition, to evaluate the sensitivity of the program estimates. These estimates of program short-run effects on enrollment are extrapolated to the lifetime schooling and the earnings of adults to approximate the internal rate of return on the public schooling subsidies as they increase expected private wages.
The relationship between deforestation and income across 66 countries of Latin America, Africa and Asia is examined. Institutional characteristics as well as macroeconomic policies of each country are hypothesized to impact deforestation. Results show strong evidence of an environmental Kuznets Curve (EKC) relationship between income and deforestation for all three continents. Institutional structure and macroeconomic policy significantly affect the tropical deforestation process. Improvements in political institutions and governance significantly reduce deforestation. The factors leading to deforestation differ across regions, however, and there is no one-size-fits-all global policy recommendation for restraining the tropical deforestation process.
In regression discontinuity (RD) designs for evaluating causal effects of interventions, assignment to a treatment is determined at least partly by the value of an observed covariate lying on either side of a fixed threshold. These designs were first introduced in the evaluation literature by Thistlewaite and Campbell [1960. Regression-discontinuity analysis: an alternative to the ex-post Facto experiment. Journal of Educational Psychology 51, 309–317] With the exception of a few unpublished theoretical papers, these methods did not attract much attention in the economics literature until recently. Starting in the late 1990s, there has been a large number of studies in economics applying and extending RD methods. In this paper we review some of the practical and theoretical issues in implementation of RD methods.
This paper presents a critical history of the environmental Kuznets curve (EKC). The EKC proposes that indicators of environmental degradation first rise, and then fall with increasing income per capita. Recent evidence shows however, that developing countries are addressing environmental issues, sometimes adopting developed country standards with a short time lag and sometimes performing better than some wealthy countries, and that the EKC results have a very flimsy statistical foundation. A new generation of decomposition and efficient frontier models can help disentangle the true relations between development and the environment and may lead to the demise of the classic EKC.
This paper examines the relationship between scale and distribution issues. It is argued that since achieving a sustainable scale requires economic activity to stay within biophysical limits, considerations of equity should not be limited to the distribution of monetary measures such as income, but should include the distribution of scarce environmental services as well. In order to make this point this paper examines how differences in diet across populations lead to inequality in the distribution of environmental impact. First, the distribution of food consumption across the world’s population is examined using national data. Next, ecological footprints are estimated in order to ascertain how differences in diet affect the distribution of environmental impact. The results show that the meat-intensive diet enjoyed by many in the industrialized world leads to a greater degree of inequality in the use of environmental services than is apparent from examination of the distribution of food consumption across countries.
We develop tests for spatial-error correlation and methods of estimation in the presence of such correlation for discrete-choice models. The tests, which are based on the notion of a generalized residual, are a set of orthogonality conditions that should be satisfied under the null. When the restrictions are rejected, the full model can be estimated by generalized method of moments. These techniques are used to evaluate spatial patterns in retail-gasoline contracts. We examine whether the spatial configuration is random or whether there is a tendency towards clustering or dispersion of contract types. The data consist of all contracts between integrated oil companies and their branded service stations in the city of Vancouver. Six metrics or measures of closeness are examined: Euclidean distance, competition along streets, a combination of the first two, nearest neighbors along streets, nearest neighbors in Euclidean distance, and neighbors that share a common marked boundary.
This paper identifies neighborhood peer effects on children's school enrollment decisions using experimental evidence from the Mexican PROGRESA program. We use exogenous variation in the school participation of program-eligible children to identify peer effects on the schooling decisions of ineligible children residing in treatment communities. We find that peers have considerable influence on the enrollment decisions of program-ineligible children, and these effects are concentrated among children from poorer households. These findings imply that policies aimed at encouraging enrollment can produce large social multiplier effects. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
We exploit the unique experimental design of a social program to understand how cash
transfers to eligible households indirectly affect the consumption of ineligible households living in the same villages. This indirect effect on consumption is positive, and it operates through insurance and credit markets: ineligible households benefit from their neighbors???higher income by receiving more transfers, by borrowing more, and by reducing their precautionary savings. This exercise shows 1) how social programs may benefit the local economy at large, not only the treated; 2) how this beneficial effect is spread in the locality through informal credit and insurance arrangements; 3) how looking only at the effect on the treated
results in an underestimation of the program impact. One should analyze the effects of this type of program on the entire local economy, rather than on the treated only, and use a village-level randomization, rather than selecting treatment and control subjects from the same community.
In this article we use disaggregated data on land use and its changes to investigate the contribution of different socioeconomic and physiogeographic factors to deforestation in Mexico. The purpose is to illustrate the significance and, as far as possible, to ascertain the quantitative importance of three factors--poverty, government policies and the associated price incentives, and the security of property rights--in contributing to deforestation. Our analysis leads to three broad results: (i) we do not find any support for the assumption of the hypothesis that communal land tenure arrangements--in this case the ownership of land by the ejido--would increase deforestation (ejidos are communities, formed after the revolution of the 1920s, where until recently only usufruct rights to land existed and individual land rights were not allowed); (ii) price distortions in favor of maize, a very land intensive crop, increase deforestation while provision of technical assistance reduces deforestation; and (iii) poverty is associated with higher levels of deforestation. This implies that policy changes such as trade liberalization and elimination of government subsidies for agricultural products (as agreed under the North American Free Trade Agreement [NAFTA]) would be expected to yield not only economic but also environmental benefits, in the form of reduced pressure on existing forests. However, our analysis suggests that, despite the desirable long term effects, such a policy might negatively affect producers in poor areas where markets are highly incomplete and the spectrum of productive economic pursuits is limited. If not countered by appropriate measures, trade liberalization could be associated with an increase in rural poverty and in deforestation by the poor who, at least in the short to medium term, do not have productive alternatives. Thus, provision of safety nets in rural areas might be justified on social as well as on environmental grounds to mitigate the negative environmental implications of reduced real wages that can be associated with liberalization and elimination of subsidies in the short term, and thus to maximize their positive effect in the long term.
As standards and accountability have become increasingly prominent features of the educational landscape, educators have relied more on remedial programs such as summer school and grade retention to help low-achieving students meet minimum academic standards. Yet the evidence on the effectiveness of such programs is mixed, and prior research suffers from selection bias. However, recent school reform efforts in Chicago provide an opportunity to examine the causal impact of these remedial education programs. In 1996, the Chicago Public Schools instituted an accountability policy that tied summer school and promotional decisions to performance on standardized tests, which resulted in a highly nonlinear relationship between current achievement and the probability of attending summer school or being retained. Using a regression discontinuity design, we find that the net effect of these programs was to substantially increase academic achievement among third-graders, but not sixth-graders. In addition, contrary to conventional wisdom and prior research, we find that retention increases achievement for third-grade students and has little effect on math achievement for sixth-grade students. Copyright (c) 2004 President and Fellows of Harvard College and the Massachusetts Institute of Technology.
This paper uses an updated and revised panel data set on ambient air pollution in cities worldwide to examine the robustness of the evidence for the existence of an inverted U-shaped relationship between national income and pollution. We test the sensitivity of the pollution- income relationship to functional forms, to additional covariates, and to changes in the nations, cities, and years sampled. We find that the results are highly sensitive to these changes, and conclude that there is little empirical support for an inverted U-shaped relationship between several important air pollutants and national income in these data. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technolog
There are two fundamentally different views of the role of elections in policy formation. In one view, voters can affect candidates' policy choices: competition for votes induces politicians to move toward the center. In this view, elections
have the effect of bringing about some degree of policy compromise. In the alternative view, voters merely elect policies: politicians cannot make credible promises to moderate their policies, and elections are merely a means to decide
which one of two opposing policy views will be implemented. We assess which of these contrasting perspectives is more empirically
relevant for the U. S. House. Focusing on elections decided by a narrow margin allows us to generate quasi-experimental estimates
of the impact of a “randomized” change in electoral strength on subsequent representatives' roll-call voting records. We find
that voters merely elect policies: the degree of electoral strength has no effect on a legislator's voting behavior. For example, a large exogenous increase in electoral strength for the Democratic party in a district does not result in shifting both parties' nominees
to the left. Politicians' inability to credibly commit to a compromise appears to dominate any competition-induced convergence
in policy.
Although forests have diminished globally over the past 400 years, forest cover has increased in some areas, including India
in the last two decades. Aggregate time-series evidence on forest growth rates and income growth across countries and within
India and a newly assembled data set that combines national household survey data, census data, and satellite images of land
use in rural India at the village level over a 29-year period are used to explore the hypothesis that increases in the demand
for forest products associated with income and population growth lead to forest growth. The evidence is consistent with this
hypothesis, which also shows that neither the expansion of agricultural productivity nor rising wages in India increased local
forest cover.
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this paper draws the following conclusions from the literature. Firstly, different patent policy instruments have different effects on R&D and growth. Secondly, there is empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Thirdly, the optimal level of IPR protection should tradeoff the social benefits of enhanced innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection.
A major review of the economics of climate change under the leadership of Professor Sir Nicholas Stern was announced at the end of July 2005, reporting to the United Kingdom’s Chancellor of the Exchequer and to the Prime Minister. The Stern Review on the Economics of Climate Change is due to report in autumn 2006. This article sets out some of the issues the review is considering.
Many governments have implemented conditional cash transfer (CCT) programmes with the goal of improving options for poor families through interventions in health, nutrition, and education. Families enrolled in CCT programmes receive cash in exchange for complying with certain conditions: preventive health requirements and nutrition supplementation, education, and monitoring designed to improve health outcomes and promote positive behaviour change. Our aim was to disaggregate the effects of cash transfer from those of other programme components.
In an intervention that began in 1998 in Mexico, low-income communities (n=506) were randomly assigned to be enrolled in a CCT programme (Oportunidades, formerly Progresa) immediately or 18 months later. In 2003, children (n=2449) aged 24-68 months who had been enrolled in the programme their entire lives were assessed for a wide variety of outcomes. We used linear and logistic regression to determine the effect size for each outcome that is associated with a doubling of cash transfers while controlling for a wide range of covariates, including measures of household socioeconomic status.
A doubling of cash transfers was associated with higher height-for-age Z score (beta 0.20, 95% CI 0.09-0.30; p<0.0001), lower prevalence of stunting (-0.10, -0.16 to -0.05; p<0.0001), lower body-mass index for age percentile (-2.85, -5.54 to -0.15; p=0.04), and lower prevalence of being overweight (-0.08, -0.13 to -0.03; p=0.001). A doubling of cash transfers was also associated with children doing better on a scale of motor development, three scales of cognitive development, and with receptive language.
Our results suggest that the cash transfer component of Oportunidades is associated with better outcomes in child health, growth, and development.
This study analyses seven factors used to explain the conversion of forest to pasture in Central America between 1979 and 1994: 1) favorable markets for livestock products, 2) subsidized credit and road construction, 3) land tenure policies, 4) limited technological change in livestock, 5) policies which reduce timber values, 6) reduced levels of political violence, and 7) characteristics specific to cattle which make it attractive.