Optimal foreign aid and tariffs

This paper investigates the optimal choice of foreign aid when trade policies are decided in a non-cooperative fashion. Three alternative scenarios, depending on the timing of the actions and on whether aid is tied, are analyzed. It is shown that, in the case where aid is decided before tariffs, untied aid can lead to the reduction of the recipient's optimal trade tax. When the donor can tie the aid to a reduction in the recipient's tariff, the optimal aid level is always positive and the world can always achieve a Pareto-efficient equilibrium.

Tied aid, unemployment and welfare

The effect of foreign aid on the welfare levels of both the recipient and the donor country has been a much analysed topic for research in both the theory of international trade and development economics. In the development economics literature, concerns have been raised since the 1960s on the possible adverse effect of foreign aid on domestic savings and growth.1 The trade theory literature in this respect is much older and dates back to the 1920s when Professors Keynes and Ohlin debated on the effect of foreign aid on international terms of trade.2 Ever since, the terms of trade effect has been the cornerstone in the analysis of the welfare effect of foreign aid in the trade theory literature.3 After some early confusion, it is now well established that in a Walrasian stable world economy with two countries, a necessary condition for foreign aid to have perverse effects is that there is some distortion in either of the two countries.4 It is also known that, under normality and substitutability of goods, untied aid cannot be strictly Pareto-improving in a tariff distorted world.5

The link between foreign aid, public investment and economic growth

Länsimaat ovat rahoittaneet kehitysyhteistyöhankkeita jo lähes kuuden vuosikymmenen ajan, mutta kehitysavun tehokkuudesta ei olla edelleenkään päästy yksimielisyyteen. Yksi avunantajamaiden tapa vaikuttaa kehitysavun tehokkuuteen, eli avun vaikutukseen vastaanottajamaan taloudellisen kasvun kiihdyttäjänä, on sitoa ne julkisen sektorin infrastruktuurihankkeisiin. Joissain tapauksissa tämä vaikuttaa avun vastaanottajan käytökseen ja asenteisiin kehitysapua kohtaan. Tutkielmassa käsitellään kehitysavun tehokkuutta tilanteessa, jossa se on sidottu julkisen sektorin investointeihin kehitysmaassa. Tutkimus pohjaa Kalaitzidakisin ja Kalyvitisin (2008) malliin, jossa osa kehitysmaan julkisen talouden investoinneista rahoitetaan kehitysavulla. Seuraavaksi tarkastellaan ylijäämää tavoittelevan käyttäytymisen (rent- seeking) vaikutusta kehitysavun tehokkuuteen pohjaten Economidesin, Kalyvitisin ja Philippopoulosin (2008) malliin. Tutkielmassa referoidaan lisäksi tutkimuskysymystä sivuavia empiirisiä tutkimuksia, esitellään aluksi tavallisimmat kehitysyhteistyön muodot, sekä esitellään talousteoreettisia näkökulmia kehitysyhteistyön tehokkuuden määrittelylle. Tutkielma perustuu puhtaasti teoreettisiin malleihin ja niissä sovelletut menetelmät ovat matemaattisia. Tutkielmassa käsitellään ensin tapaus, jossa kehitysyhteistyöllä rahoitetaan julkisen sektorin investointihankkeita. Jossain tapauksissa kehitysavun kasvu lasku siirtää vastaanottajamaan kulutusta julkisista investoinneista kulutukseen, jolloin kehitysyhteistyövaroin osittain rahoitettujen hankkeiden koko pienenee, ja suhteellinen tehokkuus laskee. Seuraavaksi tarkastellaan tilannetta, jossa kehitysyhteistyövaroista vain osa päätyy hankkeen rahoittamiseen, ja todetaan, että kehitysavun tehokkuus ja vaikutus maan kansantulon kasvuun vähenee talouden toimijoiden ylijäämää tavoittelevan käyttäytymisen (mukaan lukien korruptio) myötä entisestään. Tämän tutkimuksen perusteella voidaan todeta, että kehitysapu vaikuttaa kehittyvän maan talouden kasvuun tapauksessa, jossa julkisia infrastruktuurihankkeita rahoitetaan osittain maan omin verovaroin ja osittain kehitysyhteistyövaroin. Ylijäämää tavoitteleva käyttäytyminen vaikuttaa kehitysavun tehokkuuteen negatiivistesti vähentäen kehitysavun positiivisia kasvuvaikutuksia.

Pattern recognition and cellular immune responses to novel Mycobacterium tuberculosis-antigens in individuals from Belarus

Background: Tuberculosis (TB) is an enduring health problem worldwide and the emerging threat of multidrug resistant (MDR) TB and extensively drug resistant (XDR) TB is of particular concern. A better understanding of biomarkers associated with TB will aid to guide the development of better targets for TB diagnosis and for the development of improved TB vaccines. Methods: Recombinant proteins (n = 7) and peptide pools (n = 14) from M. tuberculosis (M.tb) antigens associated with M.tb pathogenicity, modification of cell lipids or cellular metabolism, were used to compare T cell immune responses defined by IFN-gamma production using a whole blood assay (WBA) from i) patients with TB, ii) individuals recovered from TB and iii) individuals exposed to TB without evidence of clinical TB infection from Minsk, Belarus. Results: We identified differences in M.tb target peptide recognition between the test groups, i.e. a frequent recognition of antigens associated with lipid metabolism, e.g. cyclopropane fatty acyl phospholipid synthase. The pattern of peptide recognition was broader in blood from healthy individuals and those recovered from TB as compared to individuals suffering from pulmonary TB. Detection of biologically relevant M.tb targets was confirmed by staining for intracellular cytokines (IL-2, TNF-alpha and IFN-gamma) in T cells from non-human primates (NHPs) after BCG vaccination. Conclusions: PBMCs from healthy individuals and those recovered from TB recognized a broader spectrum of M.tb antigens as compared to patients with TB. The nature of the pattern recognition of a broad panel of M.tb antigens will devise better strategies to identify improved diagnostics gauging previous exposure to M.tb; it may also guide the development of improved TB-vaccines.

Channel Islands marine protected areas first 5 years of monitoring: 2003-2008 [Report produced by the California Department of Fish and Game in collaboration with the Partnership for Interdisciplinary Studies of Coastal Oceans (PISCO), Channel Islands National Marine Sanctuary, and Channel Islands National Park]

The Channel Islands—sometimes called the Galapagos of North America—are known for their great beauty, rich biodiversity, cultural heritage, and recreational opportunities. In 1980, in recognition of the islands’ importance, the United States Congress established a national park encompassing 5 of California’s Channel Islands (Santa Barbara, Anacapa, Santa Cruz, Santa Rosa, and San Miguel Islands) and waters within 1 nautical mile of the islands. In the same year, Congress declared a national marine sanctuary around each of these islands, including waters up to 6 nautical miles offshore. Approximately 60,000 people visit the Channel Islands each year for aquatic recreation such as fishing, sailing, kayaking, wildlife watching, surfing, and diving. Another 30,000 people visit the islands for hiking, camping, and sightseeing. Dozens of commercial fishing boats based in Santa Barbara, Ventura, Oxnard, and other ports go to the Channel Islands to catch squid, spiny lobster, sea urchin, rockfish, crab, sheephead, flatfish, and sea cucumber, among other species. In the past few decades, advances in fishing technology and the rising number of fishermen, in conjunction with changing ocean conditions and diseases, have contributed to declines in some marine fishes and invertebrates at the Channel Islands. In 1998, citizens from Santa Barbara and Ventura proposed establishment of no-take marine reserves at the Channel Islands, beginning a 4-year process of public meetings, discussions, and scientific analyses. In 2003, the California Fish and Game Commission designated a network of marine protected areas (MPAs) in state waters around the northern Channel Islands. In 2006 and 2007, the National Oceanic and Atmospheric Administration (NOAA) extended the MPAs into the national marine sanctuary’s deeper, federal waters. To determine if the MPAs are protecting marine species and habitats, scientists are monitoring ecological changes. They are studying changes in habitats; abundance and size of species of interest; the ocean food web and ecosystem; and movement of fish and invertebrates from MPAs to surrounding waters. Additionally, scientists are monitoring human activities such as commercial and recreational fisheries, and compliance with MPA regulations. This booklet describes some results from the first 5 years of monitoring the Channel Islands MPAs. Although 5 years is not long enough to determine if the MPAs will accomplish all of their goals, this booklet offers a glimpse of the changes that are beginning to take place and illustrates the types of information that will eventually be used to assess the MPAs’ effectiveness. (PDF contains 24 pages.)

The Annual Economic Survey of Federal Gulf Shrimp Permit Holders: Report on the Design, Implementation, and Descriptive Results for 2006

This technical memorandum documents the design, implementation, data preparation, and descriptive results for the 2006 Annual Economic Survey of Federal Gulf Shrimp Permit Holders. The data collection was designed by the NOAA Fisheries Southeast Fisheries Science Center Social Science Research Group to track the financial and economic status and performance by vessels holding a federal moratorium permit for harvesting shrimp in the Gulf of Mexico. A two page, self-administered mail survey collected total annual costs broken out into seven categories and auxiliary economic data. In May 2007, 580 vessels were randomly selected, stratified by state, from a preliminary population of 1,709 vessels with federal permits to shrimp in offshore waters of the Gulf of Mexico. The survey was implemented during the rest of 2007. After many reminder and verification phone calls, 509 surveys were deemed complete, for an ineligibility-adjusted response rate of 90.7%. The linking of each individual vessel’s cost data to its revenue data from a different data collection was imperfect, and hence the final number of observations used in the analyses is 484. Based on various measures and tests of validity throughout the technical memorandum, the quality of the data is high. The results are presented in a standardized table format, linking vessel characteristics and operations to simple balance sheet, cash flow, and income statements. In the text, results are discussed for the total fleet, the Gulf shrimp fleet, the active Gulf shrimp fleet, and the inactive Gulf shrimp fleet. Additional results for shrimp vessels grouped by state, by vessel characteristics, by landings volume, and by ownership structure are available in the appendices. The general conclusion of this report is that the financial and economic situation is bleak for the average vessels in most of the categories that were evaluated. With few exceptions, cash flow for the average vessel is positive while the net revenue from operations and the “profit” are negative. With negative net revenue from operations, the economic return for average shrimp vessels is less than zero. Only with the help of government payments does the average owner just about break even. In the short-term, this will discourage any new investments in the industry. The financial situation in 2006, especially if it endures over multiple years, also is economically unsustainable for the average established business. Vessels in the active and inactive Gulf shrimp fleet are, on average, 69 feet long, weigh 105 gross tons, are powered by 505 hp motor(s), and are 23 years old. Three-quarters of the vessels have steel hulls and 59% use a freezer for refrigeration. The average market value of these vessels was $175,149 in 2006, about a hundred-thousand dollars less than the average original purchase price. The outstanding loans averaged $91,955, leading to an average owner equity of $83,194. Based on the sample, 85% of the federally permitted Gulf shrimp fleet was actively shrimping in 2006. Of these 386 active Gulf shrimp vessels, just under half (46%) were owner-operated. On average, these vessels burned 52,931 gallons of fuel, landed 101,268 pounds of shrimp, and received $2.47 per pound of shrimp. Non-shrimp landings added less than 1% to cash flow, indicating that the federal Gulf shrimp fishery is very specialized. The average total cash outflow was $243,415 of which $108,775 was due to fuel expenses alone. The expenses for hired crew and captains were on average $54,866 which indicates the importance of the industry as a source of wage income. The resulting average net cash flow is $16,225 but has a large standard deviation. For the population of active Gulf shrimp vessels we can state with 95% certainty that the average net cash flow was between $9,500 and $23,000 in 2006. The median net cash flow was $11,843. Based on the income statement for active Gulf shrimp vessels, the average fixed costs accounted for just under a quarter of operating expenses (23.1%), labor costs for just over a quarter (25.3%), and the non-labor variable costs for just over half (51.6%). The fuel costs alone accounted for 42.9% of total operating expenses in 2006. It should be noted that the labor cost category in the income statement includes both the actual cash payments to hired labor and an estimate of the opportunity cost of owner-operators’ time spent as captain. The average labor contribution (as captain) of an owner-operator is estimated at about $19,800. The average net revenue from operations is negative $7,429, and is statistically different and less than zero in spite of a large standard deviation. The economic return to Gulf shrimping is negative 4%. Including non-operating activities, foremost an average government payment of $13,662, leads to an average loss before taxes of $907 for the vessel owners. The confidence interval of this value straddles zero, so we cannot reject, with 95% certainty, that the population average is zero. The average inactive Gulf shrimp vessel is generally of a smaller scale than the average active vessel. Inactive vessels are physically smaller, are valued much lower, and are less dependent on loans. Fixed costs account for nearly three quarters of the total operating expenses of $11,926, and only 6% of these vessels have hull insurance. With an average net cash flow of negative $7,537, the inactive Gulf shrimp fleet has a major liquidity problem. On average, net revenue from operations is negative $11,396, which amounts to a negative 15% economic return, and owners lose $9,381 on their vessels before taxes. To sustain such losses and especially to survive the negative cash flow, many of the owners must be subsidizing their shrimp vessels with the help of other income or wealth sources or are drawing down their equity. Active Gulf shrimp vessels in all states but Texas exhibited negative returns. The Alabama and Mississippi fleets have the highest assets (vessel values), on average, yet they generate zero cash flow and negative $32,224 net revenue from operations. Due to their high (loan) leverage ratio the negative 11% economic return is amplified into a negative 21% return on equity. In contrast, for Texas vessels, which actually have the highest leverage ratio among the states, a 1% economic return is amplified into a 13% return on equity. From a financial perspective, the average Florida and Louisiana vessels conform roughly to the overall average of the active Gulf shrimp fleet. It should be noted that these results are averages and hence hide the variation that clearly exists within all fleets and all categories. Although the financial situation for the average vessel is bleak, some vessels are profitable. (PDF contains 101 pages)

Developing effective restoration plans to tackle the widespread impairment of coastal swimming and shellfishing waters

Congress established a legal imperative to restore the quality of our surface waters when it enacted the Clean Water Act in 1972. The act requires that existing uses of coastal waters such as swimming and shellfishing be protected and restored. Enforcement of this mandate is frequently measured in terms of the ability to swim and harvest shellfish in tidal creeks, rivers, sounds, bays, and ocean beaches. Public-health agencies carry out comprehensive water-quality sampling programs to check for bacteria contamination in coastal areas where swimming and shellfishing occur. Advisories that restrict swimming and shellfishing are issued when sampling indicates that bacteria concentrations exceed federal health standards. These actions place these coastal waters on the U.S. Environmental Protection Agencies’ (EPA) list of impaired waters, an action that triggers a federal mandate to prepare a Total Maximum Daily Load (TMDL) analysis that should result in management plans that will restore degraded waters to their designated uses. When coastal waters become polluted, most people think that improper sewage treatment is to blame. Water-quality studies conducted over the past several decades have shown that improper sewage treatment is a relatively minor source of this impairment. In states like North Carolina, it is estimated that about 80 percent of the pollution flowing into coastal waters is carried there by contaminated surface runoff. Studies show this runoff is the result of significant hydrologic modifications of the natural coastal landscape. There was virtually no surface runoff occurring when the coastal landscape was natural in places such as North Carolina. Most rainfall soaked into the ground, evaporated, or was used by vegetation. Surface runoff is largely an artificial condition that is created when land uses harden and drain the landscape surfaces. Roofs, parking lots, roads, fields, and even yards all result in dramatic changes in the natural hydrology of these coastal lands, and generate huge amounts of runoff that flow over the land’s surface into nearby waterways. (PDF contains 3 pages)

National summary of NOAA's shallow-water benthic habitat mapping of U.S. coral reef ecosystems

Coral reef ecosystems are some of the most complex and important ecosystems in the marine environment. They are also among the most biologically diverse and economically valuable ecosystems on earth, producing billions of dollars in food, as well as providing a suite of ecological services, such as recreation and tourism activities and coastal protection from storm and wave action. Yet, despite their value and importance, these fragile ecosystems are declining at an alarming rate (Waddell and Clarke (eds.) 2008) due to a myriad of threats both natural and manmade, including climate change, fishing pressure, and runoff and sedimentation. In response, the Unites States Coal Reef Task Force was established in 1998 by Presidential Executive Order 13089 to lead U.S. efforts to preserve and protect the nation’s coral reef ecosystems. In order to better understand the current state of coral reef ecosystems and successfully mitigate the impacts of stressors, informational products, such as benthic (or sea floor) habitat maps, are critical. Benthic habitat maps support the ability to prioritize areas for further study and protection, and offer a baseline to evaluate the changes in ecosystems over time. In 2000, the United States Coral Reef Task Force charged NOAA with leading federal efforts to produce comprehensive digital maps of all U.S. shallow-water (approximately 0 to 30 m in depth) coral reef ecosystem habitats.

Guide to the coastal and surface zooplankton of the south-western Indian Ocean. Occasional Publication of the Marine Biological Association 15

A guide compiled as an aid to researchers in the identification of the coastal and shallow water, south-western Indian Ocean pelagic zooplankton, as much of the identification literature covering this area of amazing biodiversity is currently spread through the scientific literature and not accessible without extensive library resources. Most zooplankton groups, except fish larvae and eggs, have been covered, but some specialist groups have not yet been dealt with in great detail. However, a selection of representative members of most groups have been given, so that organisms can at least be assigned to perhaps a particular genus within the main group. The species list is based on zooplankton sampling carried out round the coastal areas of the islands of Mahé and Aldabra (Seychelles), Rodrigues (Mauritius), Madagascar and from a sampling transect between Seychelles and Rodrigues. The guide therefore includes a high proportion of the island-coastal and surface water zooplankton of the whole Indian Ocean. The location where a particular species has been sampled has been noted and some species that have not been sampled, but are known to occur in the region, have been included. Comprehensive taxonomic information has not been presented, but sufficient information should be given to identify each species. Keys have not yet been included for genera, as further species will be added. A bibliography of relevant plankton references has also been included.

Bull Creek/May River PSG-R-008

The South Carolina Department of Natural Resources provides maps to recreational and state shellfish grounds, available to the public for recreational harvesting or to commercial harvest. This map shows the location of Bull Creek/May River PSG-R-008 Recreational Shellfish Ground in Beaufort County.

Last End Point / Pinckney Island PSG - R036/R037

The South Carolina Department of Natural Resources provides maps to recreational and state shellfish grounds, available to the public for recreational harvesting or to commercial harvest. This map shows the location of Last End Point / Pinckney Island PSG - R036/R0378 Recreational Shellfish Ground in Beaufort County.

Chechessee Point PSG - R061

The South Carolina Department of Natural Resources provides maps to recreational and state shellfish grounds, available to the public for recreational harvesting or to commercial harvest. This map shows the location of Chechessee Point PSG - R061 Recreational Shellfish Ground in Beaufort County.

Station Creek PSG - R089

The South Carolina Department of Natural Resources provides maps to recreational and state shellfish grounds, available to the public for recreational harvesting or to commercial harvest. This map shows the location of Station Creek PSG - R089 Recreational Shellfish Ground in Beaufort County.

Ashe Island PSG - R132

The South Carolina Department of Natural Resources provides maps to recreational and state shellfish grounds, available to the public for recreational harvesting or to commercial harvest. This map shows the location of Ashe Island PSG - R132 Recreational Shellfish Ground in Colleton County.

Leadenwah Creek PSG - R173, R174, R181

The South Carolina Department of Natural Resources provides maps to recreational and state shellfish grounds, available to the public for recreational harvesting or to commercial harvest. This map shows the location of Leadenwah Creek PSG - R173, R174, R181 Recreational Shellfish Ground in Charleston County.