Building economic capability to improve the management of marine resources in Australia: Final report

FRDC project 2008/306 Building economic capability to improve the management of marine resources in Australia was developed and approved in response to the widespread recognition and acknowledgement of the importance of incorporating economic considerations into marine management in Australia and of the persistent undersupply of suitably trained and qualified individuals capable of providing this input. The need to address this shortfall received broad based support and following widespread stakeholder consultation and building on previous unsuccessful State-based initiatives, a collaborative, cross-jurisdictional cross-institutional capability building model was developed. The resulting project sits within the People Development Program as part of FRDC’s ‘investment in RD&E to develop the capabilities of the people to whom the industry entrusts its future’, and has addressed its objectives largely through three core activities: 1. The Fisheries Economics Graduate Research Training Program which provides research training in fisheries/marine economics through enrolment in postgraduate higher degree studies at the three participating Universities; 2. The Fisheries Economics Professional Training Program which aims to improve the economic literacy of non-economist marine sector stakeholders and was implemented in collaboration with the Seafood Cooperative Research Centre through the Future Harvest Masterclass in Fisheries Economics; and, 3. The Australian Fisheries Economics Network (FishEcon) which aims to strengthen research in the area of fisheries economics by creating a forum in which fisheries economists, fisheries managers and Ph.D. students can share research ideas and results, as well as news of upcoming research opportunities and events. These activities were undertaken by a core Project team, comprising economic researchers and teachers from each of the four participating institutions (namely the University of Tasmania, the University of Adelaide, Queensland University of Technology and the Commonwealth Scientific and Industrial Research Organisation), spanning three States and the Commonwealth. The Project team reported to and was guided by a project Steering Committee. Commensurate with the long term nature of the project objectives and some of its activities the project was extended (without additional resources) in 2012 to 30th June 2015.

Do more decentralized local governments do better? an evaluation of the 2001 decentralization reform in Colombia

In this paper I evaluate the impact of the 2001 decentralization reform in Colombia. I use data from Colombia's municipalities. I look at the effect of the 2001 reform on enrolment in pre-college schools. While all municipalities received earnmarked national transfers, withthe reform some of then now have more responsabilities to provide education (deeper decen-tralization) than others. Particulary important, the reform entitle the more decentralizedmunicipalities to sign subsidy contracts with private school. Departments (the regional gov-ernments) are entitle to sign this type of contracts for the less decentralized municipalities.Since the rule for municipalities to receive more responsabilities follows and exogenous popu-lation threshold, I can implement Regression Discontinuity Design. Enrolment is measuredthrough two variables: the number of students enroled in public schools and the number of subsidized students enroled in private schools. Results sugest that more decentralized mu-nicipalities subsidize more students in private schools. The difference is significant at all thelevels of pre-college school for the period 2004-2006. In 2005, the difference accounts for20% of enrolment in private schools and 3% of population of school age. Besides, there are not significant differences among municipalities regarding enrolment in public schools.

The engineer under FDIC's conditions of contract for construction

FIDIC has over the years produced standard forms of contracts for the international procurement of projects. A source of continuing criticism of its Red Book concerns the duality in the traditional role of the engineer as the employer's agent and as an independent third party holding the balance fairly between the employer and the contractor. In response to this and other criticisms FIDIC produced a replacement for it in 1999. The role of the engineer under the new Red Book is critically examined in the light of relevant case law, expert commentaries and feedback from two multidisciplinary workshops with international participation. The examination identified three major changes: (1) a duty to act impartially has been replaced by a duty to make fair determination of certain matters; (2) it is open to parties to allow greater control of the engineer by the employer by stating in the appropriate part of the contract powers the engineer must not exercise without the employer's approval; (3) there is provision for a Dispute Adjudication Board (DAB) to which disputes may be referred. Although the duality has not been eliminated completely, the contract is structured flexibly enough to support those who wish to contract on the basis of the engineer acting solely as the agent of the employer.

Responsiveness to change by standard-form contract drafters: A case study of the FIDIC White Book

Purpose – The purpose of this paper is to focus on the Fédération Internationale des Ingénieurs-Conseils (FIDIC) White Book standard form of building contract. It tracks the changes to this contract over its four editions, and seeks to identify their underlying causes. Design/methodology/approach – The changes made to the White Book are quantified using a specific type of quantitative content analysis. The amended clauses are then examined to understand the nature of the changes made. Findings – The length of the contract increased by 34 per cent between 1990 and 2006. A large proportion of the overall increase can be attributed to the clauses dealing with “conflict of interest/corruption” and “dispute resolution”. In both instances, the FIDIC drafting committees have responded to international developments to discourage corruption, and to encourage the use of alternative dispute resolution. Between 1998 and 2006, the average length of the sentences increased slightly, raising the question of whether long sentences are easily understood by users of contracts. Research limitations/implications – Quantification of text appears to be particularly useful for the analysis of documents which are regularly updated because changes can be clearly identified and the length of sentences can be determined, leading to conclusions about the readability of the text. However, caution is needed because changes of great relevance can be made to contract clauses without actually affecting their length. Practical implications – The paper will be instructive for contract drafters and informative for users of FIDIC's White Book. Originality/value – Quantifying text has been rarely used regarding standard-form contracts in the field of construction.

Regulating vertical relations in the presence of retailer differentiation costs

We discuss public policy towards vertical relations, comparing different types of contracts between a manufacturer and a maximum of two retailers. Together with (potential) price competition between the retailers, we study the role of a (sunk) differentiation cost paid by them in order to relax competition in the retail market and broaden the market potential of the distributed product. This non-price competition element in the downstream market is responsible for our conclusion that, unlike in standard policy guidelines and previous theoretical analysis, restrictions in intra-brand competition may deserve a permissive treatment even in the absence of inter-brand competition, if retailer differentiation is costly.

Rethinking the ontology of the shareholder model of the corporation

Purpose – The purpose of this paper is to examine the critical assumptions lying behind the Anglo American model of corporate governance. Design/methodology/approach – Literature review examining the concept of a nexus of contracts underpinning agency theory which, it is argued, act as the platform for neo-liberal corporate governance focusing on shareholder wealth creation. Findings – The paper highlights the unaddressed critical challenge of why eighteenth century ownership structures are readily adopted in the twenty-first century. Social implications – A re-examination of wealth creation and wealth redistribution. Originality/value – The paper is highly original due to the fact that few contributions have been made in the area of rethinking shareholder value.

Contract enforcement and incentive compatibility in large economies with differential information: the role of exact feasibility

We consider exchange economies with a continuum of agents and differential information about finitely many states of nature. It was proved in Einy, Moreno and Shitovitz (2001) that if we allow for free disposal in the market clearing (feasibility) constraints then an irreducible economy has a competitive (or Walrasian expectations) equilibrium, and moreover, the set of competitive equilibrium allocations coincides with the private core. However when feasibility is defined with free disposal, competitive equilibrium allocations may not be incentive compatible and contracts may not be enforceable (see e.g. Glycopantis, Muir and Yannelis (2002)). This is the main motivation for considering equilibrium solutions with exact feasibility. We first prove that the results in Einy et al. (2001) are still valid without free-disposal. Then we define an incentive compatibility property motivated by the issue of contracts’ execution and we prove that every Pareto optimal exact feasible allocation is incentive compatible, implying that contracts of a competitive or core allocations are enforceable.

Non-monotone insurance contracts and their empirical consequences

The goal of this paper is to show the possibility of a non-monotone relation between coverage ans risk which has been considered in the literature of insurance models since the work of Rothschild and Stiglitz (1976). We present an insurance model where the insured agents have heterogeneity in risk aversion and in lenience (a prevention cost parameter). Risk aversion is described by a continuous parameter which is correlated with lenience and for the sake of simplicity, we assume perfect correlation. In the case of positive correlation, the more risk averse agent has higher cosr of prevention leading to a higher demand for coverage. Equivalently, the single crossing property (SCP) is valid and iplies a positive correlation between overage and risk in equilibrium. On the other hand, if the correlation between risk aversion and lenience is negative, not only may the SCP be broken, but also the monotonocity of contracts, i.e., the prediction that high (low) risk averse types choose full (partial) insurance. In both cases riskiness is monotonic in risk aversion, but in the last case there are some coverage levels associated with two different risks (low and high), which implies that the ex-ante (with respect to the risk aversion distribution) correlation between coverage and riskiness may have every sign (even though the ex-post correlation is always positive). Moreover, using another instrument (a proxy for riskiness), we give a testable implication to desentangle single crossing ans non single croosing under an ex-post zero correlation result: the monotonicity of coverage as a function os riskiness. Since by controlling for risk aversion (no asymmetric information), coverage is monotone function of riskiness, this also fives a test for asymmetric information. Finally, we relate this theoretical results to empirical tests in the recent literature, specially the Dionne, Gouruéroux and Vanasse (2001) work. In particular, they found an empirical evidence that seems to be compatible with asymmetric information and non single crossing in our framework. More generally, we build a hidden information model showing how omitted variables (asymmetric information) can bias the sign of the correlation of equilibrium variables conditioning on all observable variables. We show that this may be the case when the omitted variables have a non-monotonic relation with the observable ones. Moreover, because this non-dimensional does not capture this deature. Hence, our main results is to point out the importance of the SPC in testing predictions of the hidden information models.

Non-monotone insurence contracts and their empirical consequences

The goal of t.his paper is to show the possibility of a non-monot.one relation between coverage and risk which has been considered in the literature of insurance models since the work of Rothschild and Stiglitz (1976). We present an insurance model where the insured agents have heterogeneity in risk aversion and in lenience (a prevention cost parameter). Risk aversion is described by a continuou.'l parameter which is correlated with lenience and, for the sake of simplicity, we assume perfect correlation. In the case of positive correlation, the more risk averse agent has higher cost of prevention leading to a higher demand for coverage. Equivalently, the single crossing property (SCP) is valid and implies a positive correlation between coverage and risk in equilibrium. On the other hand, if the correlation between risk aversion and lenience is negative, not only may the sep be broken, but also the monotonicity of contracts, i.e., the prediction that high (Iow) risk averse types choose full (partial) insurance. In both cases riskiness is monotonic in risk aversion, but in the last case t,here are some coverage leveIs associated with two different risks (low and high), which implies that the ex-ante (with respect to the risk aversion distribution) correlation bet,ween coverage and riskiness may have every sign (even though the ex-post correlation is always positive). Moreover, using another instrument (a proxy for riskiness), we give a testable implication to disentangle single crossing and non single crossing under an ex-post zero correlation result: the monotonicity of coverage as a function of riskiness. Since by controlling for risk aversion (no asymmetric informat, ion), coverage is a monotone function of riskiness, this also gives a test for asymmetric information. Finally, we relate this theoretical results to empirica! tests in the recent literature, specially the Dionne, Gouriéroux and Vanasse (2001) work. In particular, they found an empirical evidence that seems to be compatible with asymmetric information and non single crossing in our framework. More generally, we build a hidden information model showing how omitted variabIes (asymmetric information) can bias the sign of the correlation of equilibrium variabIes conditioning on ali observabIe variabIes. We show that this may be t,he case when the omitted variabIes have a non-monotonic reIation with t,he observable ones. Moreover, because this non-monotonic reIat,ion is deepIy reIated with the failure of the SCP in one-dimensional screening problems, the existing lit.erature on asymmetric information does not capture t,his feature. Hence, our main result is to point Out the importance of t,he SCP in testing predictions of the hidden information models.

Social Panorama of Latin America 2002-2003

Includes bibliography

POST-PROJECT ASSESSMENT OF PIT LATRINES IN RURAL PANAMA

In Panama, one of the Environmental Health (EH) Sector’s primary goals is to improve the health of rural Panamanians by helping them to adopt behaviors and practices that improve access to and use of sanitation systems. In complying with this goal, the EH sector has used participatory development models to improve hygiene and increase access to latrines through volunteer managed latrine construction projects. Unfortunately, there is little understanding of the long term sustainability of these interventions after the volunteers have completed their service. With the Peace Corps adapting their Monitoring, Reporting, and Evaluation procedures, it is appropriate to evaluate the sustainability of sanitation interventions offering recommendations for the adaptions of the EH training program, project management, and evaluation procedures. Recognizing the need for evaluation of past latrine projects, the author performed a post project assessment of 19 pit latrine projects using participatory analysis methodologies. First, the author reviewed volunteers’ perspectives of pit latrine projects in a survey. Then, for comparison, the author performed a survey of latrine projects using a benchmarking scoring system to rate solid waste management, drainage, latrine siting, latrine condition, and hygiene. It was observed that the Sanitation WASH matrix created by the author was an effective tool for evaluating the efficacy of sanitation interventions. Overall more than 75%, of latrines constructed were in use. However, there were some areas where improvements could be made for both latrine construction and health and hygiene. The latrines scored poorly on the indicators related to the privacy structure and seat covers. Interestingly those are the two items least likely to be included in project subsidies. Furthermore, scores for hygiene-related indicators were low; particularly those related to hand washing and cleanliness of the kitchen, indicating potential for improvement in hygiene education. Based on these outcomes, the EH sector should consider including subsidies and standardized designs for privacy structures and seat covers for latrines. In addition, the universal adoption of contracts and/or deposits for project beneficiaries is expected to improve the completion of latrines. In order to address the low scores in the health and hygiene indicators, the EH sector should adapt volunteer training, in addition to standardizing health and hygiene intervention procedures. In doing so, the sector should mimic the Community Health Club model that has shown success in improving health and hygiene indicators, as well as use a training session plan format similar to those in the Water Committee Seminar manual. Finally, the sector should have an experienced volunteer dedicated to program oversight and post-project monitoring and evaluation.

Can a Newly Proposed Mechanism for Allocating Contracts in U.S. Electricity Wholesale Markets Lead to Lower Prices? A Game Theoretic Analysis

This study of the wholesale electricity market compares the cost-minimizing performance of the auction mechanism currently in place in U.S. markets with the performance of a proposed replacement. The current mechanism chooses an allocation of contracts that minimizes a fictional cost calculated using pay-as-offer pricing. Then suppliers are paid the market clearing price. The proposed mechanism uses the market clearing price in the allocation phase as well as in the payment phase. In concentrated markets, the proposed mechanism outperforms the current mechanism even when strategic behavior by suppliers is taken into account. The advantage of the proposed mechanism increases with increased price competition.

Stable isotope record of northeastern Australian Margin

Stable isotopic data obtained from planktonic and benthic foraminifers were used to study paleoceanographic changes along the northeastern Australian margin from late Miocene (10 Ma) to Holocene time, and to evaluate the influence of these changes on reef growth. The data indicate that variations in surface-water temperatures may have had an important effect on the reef complexes on the Queensland Plateau and possibly off the northeastern Australian margin. Three sites were studied: Leg 21, Site 209 on the eastern edge of the Queensland Plateau, and Leg 133, Site 811 on the western margin, and Site 817 on the lower southern slope of the plateau. Shallow-water bioclasts recovered from Holes 811A and 817A indicate extensive reef growth on the Queensland Plateau during the middle Miocene (before 12 Ma), signifying surface-water temperatures of 20°C or greater. The amount of reefal detritus produced during the late Miocene (10.0-5.2 Ma) decreased progressively, resulting in a reduction in area of the reef complexes. The isotopic data from planktonic foraminifers in these late Miocene age sediments indicate the presence of relatively cool surface waters (16°-19°C), which may have been a major factor contributing to the demise of the reefs on the Queensland Plateau. Surface waters remained cool until the middle Pleistocene (1.2-0.5 Ma), when the surface-water temperature apparently increased to approximately 25°C, recorded both in the isotopic data and by renewed reef growth. This increase occurred simultaneously (within the error of the age model) with the initiation of the Great Barrier Reef. We propose that cooling of surface waters during the early late Miocene contributed to reef decline on the Queensland Plateau, and that subsequent warming of surface waters during the middle Pleistocene promoted the initiation of reef growth on the northeastern Australian margin. Reef development on the Queensland Plateau never recovered to the middle Miocene extent because of a combination of tectonic (accelerated subsidence of the plateau) and paleoceanographic (the cooler surface waters present from the late Miocene throughout the Pliocene) factors. Variations in seafloor d18O appear to be controlled by regional factors, as indicated by the similarity of data from Sites 811 and 817 to those from Site 590 on Lord Howe Rise.

Late Pliocene carbonate mineralogy of ODP Hole 133-818B

Shedding of shallow carbonate material toward the deep slopes and basin floors is clearly tied to the position of the carbonate bank tops relative to the photic zone. The onset of bank shedding in periplatform sediments can record either the flooding of the bank tops within the photic zone during a rise in sea level following a period of exposure, referred to in the literature as the "highstand shedding" scenario, or the reentry of the bank tops into the photic zone during a lowering of sea level following a period of drowning, referred to as the "lowstand shedding" scenario. Results from Leg 133 post-cruise research on the Pliocene sequences, drilled in six sites within different slope settings of the Queensland Plateau, seem to point out that the latter "lowstand shedding" scenario can be applied to this particular carbonate system. At the Queensland Plateau sites, the early Pliocene (5.2-3.5 Ma) and the earliest part of the late Pliocene (3.5-2.9 Ma) age sequences were characterized, especially in the ôdeepö Sites 811 and 817, by pelagic sediments (foraminifers and coccoliths) and by typically pelagic sedimentation rates not exceeding 20 mm/k.y. The earliest part of the late Pliocene age section was characterized by well-developed hardgrounds in the "shallow" Sites 812 and 814 and by normal pelagic sediments mixed with reworked phosphatized planktonic foraminifers in Site 813. Finally, the early part of the late Pliocene (2.9-2.4 Ma) section was characterized by high sedimentation rates, related to the shedding and admixture into the pelagic sediments of bank-derived materials. These bank-derived materials consist of either diagenetically unaltered fine aragonite with traces of dolomite in Site 818 or micritic calcite resulting from seafloor and/or shallow burial alteration in the deepest Sites 817 and 811. The highest sedimentation rates (163 mm/k.y.) were recorded in Site 818, drilled nearest the modern carbonate bank of Tregrosse Reef. The sedimentation rates decrease with increasing distance from Tregrosse Reef - 120 mm/k.y. in Site 817 and 47.5 mm/k.y. in Site 811. The initial appearance of fine aragonite in Site 818, corresponding to the transition from pelagic to periplatform sedimentation rates, has been dated at 2.9 Ma. This Pliocene sediment pattern on the Queensland Plateau is different from the pattern observed in sediments from two earlier ODP legs (i.e., Leg 101 in the Bahamas and in Leg 115 in the Maldives), where aragonite-rich sediments, characterized by high periplatform sedimentation rates, were observed in the lower Pliocene section (5.2-3.5 Ma), whereas the upper Pliocene (3.5-1.6 Ma) sediments are more pelagic in nature and are characterized by low sedimentation rates or major hiatuses. These Pliocene periplatform sequences in the Bahamas and in the Maldives and late Quaternary age periplatform sequences worldwide have pointed out that "highstand shedding" was the typical response of carbonate platforms to fluctuations in sea level, just opposite to a "lowstand shedding" response to sea-level fluctuations, typical of siliciclastic shelves. Assuming that the envelope of Haq et al.'s (1987) sea-level curve, showing a well-defined lowering of sea level between 3.5 and 2.9 Ma, can also be applied to the southwest Pacific Ocean, based on a high-resolution Pliocene d18O record from the Ontong Java Plateau recently published by Jansen et al. (1993, doi:10.2973/odp.proc.sr.130.028.1993), the Pliocene periplatform sequences on the Queensland Plateau would have recorded the reentry of the bank tops into the photic zone during a general lowering of sea level, following an interval characterized by high sea level, during which the shallow carbonate system on the Queensland Plateau was drowned. The early Pliocene age (5.2-3.5 Ma) sediments deposited on the Queensland Plateau, an established interval of eustatic sea-level highstand, are typically pelagic in character. In addition, relatively cold surface temperatures (estimated to have ranged from 18° to 20°C by Isern et al. [this volume]) might have also stressed the reefs during early Pliocene time and contributed to the drowning of the Queensland Plateau carbonate system during the late Miocene and early Pliocene. Differential and relatively high subsidence rates, inferred by variations in paleodepth of water (based upon benthic foraminifer assemblages; Katz and Miller, this volume) may also have influenced the drowning of the carbonate bank tops on the Queensland Plateau during the late Miocene and early Pliocene. The sediments of early late Pliocene age (2.9-2.4 Ma), a well-established interval of lowering of sea level, are clearly periplatform and cyclic in nature. High-frequency (~40 k.y.) aragonite cycles, well-developed between 2.9 and 2.45 Ma, correlate with the planktonic high-resolution Pliocene d18O record from the Ontong Java Plateau, a good sea-level proxy (Jansen et al., in press). Contrary to late Quaternary age aragonite cycles from the Bahamas, the Nicaragua Rise, the Maldives, and the Queensland Plateau, the late Pliocene aragonite cycles in Hole 818B display high levels of aragonite during glacial stages and, therefore, lowstands of sea level. In addition, sediments deposited during the earliest part of the late Pliocene (3.5-2.9 Ma), transition between the early Pliocene highstand and the late Pliocene lowering in sea level, have recorded the first evidence of a fall in sea level, by (1) the occurrence of synchronous submarine hardgrounds in the two shallowest sites (Sites 812 and 814), (2) the deposition of reworked material from the shallower part of the slope into the intermediate Sites 813 and 818, and (3) the deposition of pelagic sediments in the deepest Sites 817 and 817. In summary, contrary to previous findings, the Pliocene periplatform sediments on the Queensland Plateau appear to have recorded a regional shedding of shallow carbonate bank tops during an interval of sea-level lowering, a good illustration of the "carbonate lowstand shedding" scenario, occurring during the reentry of previously drowned carbonate bank tops into the photic zone related to a decrease in sea level.