VCM or PPM? A comparison of the performance of two voluntary public goods mechanisms

Little progress has been made toward understanding the relative performance of the two mechanisms most widely used for fundraising: the Voluntary Contribution (VCM) and Provision Point (PPM) mechanisms. This paper provides direct comparisons of the relative performance of variants of the VCM and PPM as they are most commonly implemented in the field. The research makes use of 1296 individual observations from 721 subjects, including 40 observations from a field experiment. A meta-analysis of the determinants of contribution levels and bootstrap estimates of the relative efficiency of the two mechanisms provide novel analyses of public goods experimental data. Overall, the PPM is found to increase total contributions, to be more responsive to changes in induced value, and to be generally more efficient than the VCM. For public goods with a benefit-cost ratio in the interval [1, 1.4), however, the VCM captures a greater portion of available benefits than the PPM.     

Shared Sectoral Growth Versus the Dual Economy Model: Evidence from Côte d'Ivoire,Ghana, and Zimbabwe

Abstract: Though recently challenged, the dual economy view has affected development economics and development policy, either explicitly or implicitly, for more than half a century. According to this view, agriculture merely serves to build the industrial sector — in particular, agriculture has no role as an engine of growth in the long term. Examining agriculture, industry and service sector growth in Côte d'Ivoire, Ghana, and Zimbabwe over more than three decades, we find little empirical support for this view. On the contrary, our analyses find a large degree of interdependence in long‐run sectoral growth, implying that the sectors ‘grow together’ or, similarly, that there are externalities or spillovers between sectors. Policy implications are also discussed; these include directing more attention towards the interdependencies in sectoral growth broadly defined. In particular, our findings have implications for the design of education and health programs, as well. This improved understanding of inter‐sectoral dynamics at all levels may facilitate policy implementation aimed at increasing economic growth — and thereby ultimately improving peoples' livelihoods — in Africa and elsewhere.     

Land and contract farming: Changes in the distribution and meanings of land in Kilombero,Tanzania

In the context of contract farming of sugarcane in an outgrower scheme in Tanzania, this paper explores how the scheme has fundamentally altered people's relationships with the land over the last 50 years, in particular, since 1999, when, after three decades, the sugar parastatal was privatized. The paper reviews the literature on the mutual relationship between contract farming and land ownership and examines the scheme with a focus on long-term changes in the forms of land acquisitions and land use. We argue that the meaning and importance of landownership in contract farming schemes needs to be reassessed if participation in contract farming entails a departure from previous forms of acquiring land, generates new spatial patterns of agricultural production, and necessitates additional economic and social resources in order to transform land into an economic asset.     

The sustainability of timber production from Eastern Amazonian forests

Although the regulations are imperfectly enforced, logging firms in the Brazilian Amazon are subject to forest management regulations intended to reduce environmental damage and protect future forest productivity. Additionally, voluntary best practices firms adopt to achieve environmental performance that exceed regulatory requirements are largely limited to reduced impact logging (RIL) systems that reduce harvest damage relative to conventional logging systems used by a large majority of firms in the region. Existing regulations combined with best practices may not be adequate to ensure sustained yields. This inadequacy is an important issue as Brazil implements an ambitious program of forest concessions on public lands. We analyze the profitability and environmental outcomes of best logging practices and proposed sustainability requirements. We propose two operational definitions of sustainability (the first focusing on sustaining stand-level timber volumes and the other focusing on sustaining species-level volumes within the stand) based on sustaining timber inventories across cutting cycles rather than on sustaining overall harvest yields. RIL is shown to be profitable for loggers and increase the timber available for future harvests. While volume predicted to be available for the second and third harvests are significantly lower than the available timber in the unlogged forest, the second and third harvests are projected to be profitable and have the potential for sustainability despite high opportunity costs. However, as harvesting is repeated into the future, results show the composition of the harvest shifts from higher-value shade-tolerant and emergent species toward a greater reliance on longer-lived, lower-value pioneer species. This shift may create pressure to expand the forest base under management in order to continue to supply high-value species or increase the risk of timber trespass in conservation units and areas under community or indigenous management.     

Measuring Stigma: The Behavioral Implications of Disgust

Stigmatization of products and technologies can lead to large monetary losses even when there are no associative risks. This paper reports on experiments that provide insight into the behavioral responses of disgust from an economic perspective. We use a dead sterilized cockroach to ‘contaminate’ drinking water and generate willingness-to-pay (WTP) and willingness-to-accept (WTA) measures of participants’ reactions. These results are contrary to previous results from research not involving financial incentives, as most participants’ WTP and WTA values are near zero for drinking cockroach contaminated water. Additionally, filtration of cockroach water leads participants to become significantly more likely to request compensation compared to spring water, but it does not result in requesting significantly more money to drink it. Finally, WTP and WTA differences can be explained by participants’ decision on whether or not to request compensation and not by the amount of compensation.     

Strategic Environmental Policy Under Incomplete Information

This paper introduces incomplete information into recent analyses of strategic environmental policy. It is shown how asymmetric information between planners and producers affects national incentives to impose strategic environmental standards on domestic industries in international oligopolistic competition. Relative to the full-information case, incomplete information is likely to mitigate allocative distortions originating from strategic behaviour. A countervailing effect, tending to raise distortion, is however revealed from the analysis. This effect is absent when governments intervene in free trade through direct production subsidies. The results suggest that incentives to capture foreign rents are less reduced due to private information, when environmental standards, rather than direct production subsidies, are the strategic instrument.