Financial improvement planning in local governments in Southern Africa,with special reference to Zambia

Continuing decentralisation in most developing countries increases pressure on local governments to manage more functions and services and larger budgets. In this context, financial improvement planning (FIP) is a strategy that can be used by local governments wishing to improve or ‘fine‐tune’ their financial performance, and especially by those facing serious financial difficulties. This article examines the application of FIP in the town of Kitwe, Zambia, which faces financial difficulties within a national decentralisation framework characterised by several policy and fiscal deficiencies. The article covers how an FIP framework was developed, undertaken and the resultant interventions structured. Implications regarding the role, design and techniques of FIP in local governments within a decentralisation policy framework are elaborated upon. Effective decentralisation in southern African countries requires local governments to undertake sound financial management. In turn, this requires local governments to embrace challenging local policy processes. Development of FIP techniques, and strengthening local capacity and policy to support them in local governments, should be ingredients of any country's decentralisation programme.     

Factors determining awareness and knowledge of aquatic invasive species

Public perceptions of invasive species may influence policies and programs initiated by public and private stakeholders. We investigate the determinants of the public's awareness and knowledge of invasive species as few studies have examined this relationship. We focus on aquatic invasive species (AIS) and employ survey data from property owners in a lake district. A major contribution is that we estimate a mixed trivariate binary-ordered probit regression model that accommodates correlations among unobserved characteristics, produces statistically more efficient estimates, and allows a more proper investigation of the probability of knowledge conditional on awareness. Our results provide insights for invasive species education and management programs. We find that individuals are more likely to be aware of AIS if they participate in water-based recreation, visit lakes outside their area, have a boat, belong to a lake association, or are college educated. This has a policy implication: Given high levels of AIS awareness by those most involved in activities around lakes and those with a higher education, it may be beneficial to target informational campaigns at those who do not display these characteristics, so that they can better make informed decisions about whether to support and expend money on invasive species management programs.     

Cattle and Wildlife Competition for Forage: Budget Versus Bioeconomic Analyses of Public Range Improvements in British Columbia

We analyze the gains of public investments in range productivity when cattle compete for forage with wildlife herbivores. Ignoring extra-market values by applying conventional budget analyses leads to higher cattle stocking rates and lower overall social benefits of public range improvements. This is demonstrated numerically for public forage in British Columbia, where privately profitable cattle stocking rates on newly seeded range exceed those that are socially optimal, perhaps by as much as double depending on the assumptions one makes about marginal preservation benefits. This highlights the importance of applying dynamic optimization, bioeconomic models to analyze investments in public range.
Les auteurs analysent quel gain on tire des sommes publiques investies dans la productivité des grands parcours quand les bovins et les herbivores sauvages se livrent concurrence pour les fourrages. Ne pas tenir compte des valeurs extérieures au marché en recourant à des analyses budgétaires ordinaires entraîne une hausse du taux de chargement et une réduction des avantages sociaux globaux issus de la bonification des grands parcours. Il est possible d'en faire la preuve numérique avec les pâturages publics de la Colombie-Britannique, où les parcours nouvellement ensemencés supportent une population de bovins lucrative pour l'éleveur mais supérieure au taux de chargement optimal socialement, parfois même du double, selon les hypothèses qu'on formule sur les avantages d'une préservation marginale. l'étude souligne bien qu'il est important de recourir à une optimisation dynamique, soit d'utiliser les modèles bio-économiques pour analyser les sommes investies dans l'amélioration des pâturages publics.     

Dynamic Programming and Learning Models for Management of a Nonnative Species

Nonnative invasive species result in sizeable economic damages and control costs. Because dynamic optimization models break down if controls depend in complex ways on past controls, nonuniform or scale‐dependent spatial attributes, etc., decision‐support systems that allow learning may be preferred. We compare two models of an invasive weed in California's grazing lands: (i) a stochastic dynamic programming model and (ii) a reinforcement‐based, experience‐weighted attraction (EWA) learning model. We extend the EWA approach by including stochastic forage growth and penalties for repeated application of environmentally harmful controls. Results indicate that EWA learning models offer some promise for managing invasive species. Les espèces non indigènes envahissantes entraînent des dommages économiques et des coûts de lutte considérables. Compte tenu que les modèles d'optimisation dynamique échouent lorsque les moyens de lutte dépendent, de façon complexe, de moyens de lutte antérieurs, d'attributs spatiaux influencés par l'échelle ou non uniformes, etc., l'utilisation de systèmes d'aide à la décision permettant l'apprentissage pourrait être préférable. Nous avons comparé deux modèles dans le cas d'une plante adventice envahissant les pâturages de la Californie: 1. un modèle de programmation dynamique stochastique; 2. un modèle d'apprentissage experience‐weighted attraction (EWA), fondé sur le renforcement. Nous avons élargi le modèle EWA en y incluant la croissance stochastique des fourrages et des pénalités imposées pour l'utilisation répétée de moyens de lutte dommageables pour l'environnement. Selon les résultats obtenus, les modèles d'apprentissage EWA semblent prometteurs pour la gestion des espèces envahissantes.     

A novel Monte Carlo approach to hybrid local volatility models

We present in a Monte Carlo simulation framework, a novel approach for the evaluation of hybrid local volatility [Risk, 1994, 7, 18–20], [Int. J. Theor. Appl. Finance, 1998, 1, 61–110] models. In particular, we consider the stochastic local volatility model—see e.g. Lipton et al. [Quant. Finance, 2014, 14, 1899–1922], Piterbarg [Risk, 2007, April, 84–89], Tataru and Fisher [Quantitative Development Group, Bloomberg Version 1, 2010], Lipton [Risk, 2002, 15, 61–66]—and the local volatility model incorporating stochastic interest rates—see e.g. Atlan [ArXiV preprint math/0604316, 2006], Piterbarg [Risk, 2006, 19, 66–71], Deelstra and Rayée [Appl. Math. Finance, 2012, 1–23], Ren et al. [Risk, 2007, 20, 138–143]. For both model classes a particular (conditional) expectation needs to be evaluated which cannot be extracted from the market and is expensive to compute. We establish accurate and ‘cheap to evaluate’ approximations for the expectations by means of the stochastic collocation method [SIAM J. Numer. Anal., 2007, 45, 1005–1034], [SIAM J. Sci. Comput., 2005, 27, 1118–1139], [Math. Models Methods Appl. Sci., 2012, 22, 1–33], [SIAM J. Numer. Anal., 2008, 46, 2309–2345], [J. Biomech. Eng., 2011, 133, 031001], which was recently applied in the financial context [Available at SSRN 2529691, 2014], [J. Comput. Finance, 2016, 20, 1–19], combined with standard regression techniques. Monte Carlo pricing experiments confirm that our method is highly accurate and fast.