Trust, reputation and relationships in grazing rights markets: An experimental economic study

Trust is frequently a requirement for economic exchanges and the management of natural resources. Providing public information on past actions can promote trust through the formation of reputations. We developed an economic experiment to test whether a formal reputation mechanism could facilitate trusting relationships in the tradable grazing rights markets. Providing information to create formal public reputations for market participants did not increase the overall efficiency of the market. However, it did result in greater equality of income between partners, suggesting that participants showed more concern for their partners when they knew they would be rated. Even with public reputation information, bilateral relationships remained central to the market. Market failures in existing grazing rights markets may be better addressed by measures to increase communication between partners rather than simply relying on a formal reputation mechanism.     

Comparative costs and conservation of wild species in situ, e.g. orangutans

The extent to which conservation is feasible is constrained by budgets and the financial sacrifice stakeholders are willing to bear. Therefore a possible objective for conserving a species is to minimise the cost of achieving that stated aim. For example, if a minimum viable population (MVP) of a species is to be conserved, the size and type of habitats reserved for this could be selected to minimise cost. This requires consideration of the comparative (relative) opportunity costs of reserving different land types for conservation. A general model is developed to demonstrate this and is applied to the case of the orangutan. In the ecological literature, recommendations for reserving different types of land for conservation have been based on comparisons of either the absolute economic returns they generate if converted to commercial use or on differences in the density of a species they support. These approaches are shown to be deficient because they ignore relative trade-offs between species population and economic conversion gains at alternative sites. The proposed model is illustrated for orangutan conservation.     

Project evaluation and social‐cost benefit analysis in LDCs: Awkward issues for a useful approach∗

This paper outlines some limitations of social cost‐benefit analysis (CBA) and reviews the advocacy of its use in LDCs. It argues that account should be taken in social CBA of the optimality of imperfect decision‐making and the costs of information gathering and processing. This supports the view that simple may be optimal. It is pointed out that because of informational requirements and institutional factors, the technique may lead to bias against small projects, small countries and to urban bias. Furthermore, in the past the technique has overstressed the (economic) evaluation phase of the project cycle in comparison for instance, to the identification phase. The importance of taking account of environmental spillovers and externalities in LDCs in project evaluation has not been recognized in the past by a number of economic analysts but this is changing. Many criticisms of social CBA appear to be based upon unreasonable expectations about the perfectability of decision‐making. The technique has social value if it ensures that socially unsatisfactory projects are not selected and that those selected are satisfactory, if not optimal.     

Economics,ecology, sustainable agricultural systems and development∗

The importance of ecologically sustainable economic systems and sustainable development, including sustainable agricultural development, has been recognised internationally in the last two decades and is reflected in policy initiatives in South Africa and elsewhere. However, complex issues and tradeoffs are involved in choosing between alternative productive systems. Ecologists, economists and other resource scientists need to cooperate to specify the options more carefully. Increasing human population levels and consumption levels are now widely seen as a major threat to living resources, to their life‐support systems and to sustainable development. Possible policy implications resulting from this are explored in the World Conservation Strategy. An examination of the possible attributes of different agricultural systems and forms of land use illustrates the complexity of choosing between different productive systems and leads to the question of whether sustainability should be an absolute goal in all circumstances. The question is also taken up of whether modern agricultural systems are more sustainable or less so than traditional ones.     

Transfer pricing: Technical and productivity change within the firm

Use of transfer prices is regarded by many writers as an efficient means of management of multidivisional firms. Its use in effect creates an internal market for the firm. However, its value as a management technique isknown to be subject to a number of limitations of the type discussed in the general economic theory of market failure. Nevertheless, two important limitations of transfer pricing have been neglected in the literature: (1) imputed profit/loss based on optimal transfer prices can be a poor guide to the economic value of a division to a firm when market transaction costs are important (for instance, even if a division shows an imputed loss, it may not be optimal to dispose of it), and (2) transfer pricing can retard technical change, innovation and productivity enhancement within a division to the detriment of the firm as a whole. Both aspects are examined here.     

The Environment and Sustainable Development in the Asia-Pacific: Views and Policies

Policies in relation to the environment and sustainable development in the Asia-Pacific need to be related to the international debate about such issues. This article surveys the literature on the environmental problems to which economic development is giving rise. Attention is paid to urbanisation, agriculture, aquaculture, mining, resource depletion, energy supplies and air quality, and to Asian policy responses to environmental change and calls for sustainable development.