Conserving biodiversity in production landscapes.

Alternative land uses make different contributions to the conservation of biodiversity and have different implementation and management costs. Conservation planning analyses to date have generally assumed that land is either protected or unprotected, and that the unprotected portion does not contribute to conservation goals. We develop and apply a new planning approach that explicitly accounts for the contribution of a diverse range of land uses to achieving conservation goals. Using East Kalimantan (Indonesian Borneo) as a case study, we prioritize investments in alternative conservation strategies and account for the relative contribution of land uses ranging from production forest to well-managed protected areas. We employ data on the distribution of mammals and assign species-specific conservation targets to achieve equitable protection by accounting for life history characteristics and home range sizes. The relative sensitivity of each species to forest degradation determines the contribution of each land use to achieving targets. We compare the cost effectiveness of our approach to a plan that considers only the contribution of protected areas to biodiversity conservation, and to a plan that assumes that the cost of conservation is represented by only the opportunity costs of conservation to the timber industry. Our preliminary results will require further development and substantial stakeholder engagement prior to implementation; nonetheless we reveal that, by accounting for the contribution of unprotected land, we can obtain more refined estimates of the costs of conservation. Using traditional planning approaches would overestimate the cost of achieving the conservation targets by an order of magnitude. Our approach reveals not only where to invest, but which strategies to invest in, in order to effectively and efficiently conserve biodiversity.

The optimal length of contracts with application to outsourcing

This paper resolves three empirical puzzles in outsourcing by formalizing the adaptationcost of long-term performance contracts. Side-trading with a new partner alongside a long-term contract (to exploit an adaptation-requiring investment) is usually less effective than switching to the new partner when the contract expires. So long-term contracts that prevent holdup of specific investments may induce holdup of adaptation investments. Contract length therefore trades of specific and adaptation investments. Length should increase with the importance and specificity of self-investments, and decrease with the importance of adaptation investments for which side-trading is ineffective. My general model also shows how optimal length falls with cross-investments and wasteful investments.

Managing competition in professional services and the burden of inertia

Professional services require certain organizational patterns in order to avoid information asymmetries and external effects. These same patterns are used within production structures involving various degrees of monopoly. However, competitive restraints are justified today only when substantial external effects are clearly present, whereas information asymmetries hardly justify such restraints because reputational investments have become widespread in the economy and are relatively efficient in overcoming such asymmetries. As a consequence, innovation in the production of externalities can make competitive constraints unnecessary.

Quality safeguards and regulation of online pharmacies

Using econometric evidence, this article confirms that distribution ofmedicines online is split into two market segments of very diversequality, and identifies the factors that drive quality and qualityassurance in this activity. Unlike fraudulent, rogue, websites, whichoffer scant guarantees and usually sell just a few medicines withoutprescription, online pharmacies offering insurance coverage and linkedto conventional pharmacies typically sell a wholerange of drugs, require third-party medical prescriptions and provideabundant information to patients. It is shown that, where onlinepharmacies are allowed to act legally, market forces enhance quality,as private insurers require professional standards, and specialized thirdparties make a business of certifying them. Furthermore, older onlinepharmacies and those running conventional operations offer higherquality, probably because of reputational investments. Overall, this evidence supports licensing online pharmacies, especiallyconsidering that prohibiting them is ineffective against fraudulent sites.

The survival of the welfare state

This paper provides an analytical characterization of Markov perfectequilibria in a politico-economic model with repeated voting, whereagents vote over distortionary income redistribution. The key featureof the theory is that the future constituency of redistributive policiesdepends positively on the current level of redistribution, since thisaffects both private investments and the future distribution of voters.Agents vote rationally and fullly anticipate the effects of their politicalchoice on both private incentives and future voting outcomes. The modelfeatures multiple equilibria. In "pro-welfare" equilibria, both welfarestate policies and their effects on distribution persist forever. In"anti-welfare equilibria", even a majority of beneficiaries ofredistributive policies vote strategically so as to induce the formationof a future majority that will vote for zero redistribution.

Ex post bargaining, labor coordination and wage formation at the firm level

We lay out a model of wage bargaining with two leading features:bargaining is ex post to relevant investments and there isindividual bargaining in firms without a Union. We compareindividual ex post bargaining to coordinated ex post bargainingand we analyze the effects on wage formation. As opposed to exante bargaining models, the costs of destroying the employmentrelationship play a crucial role in determining wages. Highfiring costs in particular yield a rent for employees. Ourtheory points to a employer size-wage effect that is independentof the production function and market power. We derive a simpleleast squares specification from the theoretical model thatallow us to estimate components of the wage premium fromcoordination. We reject the hypothesis that labor coordinationdoes not alter the extensive form of the bargaining game. Laborcoordination substantially increases bargaining power butdecreases labor's ability to pose costly threats to the firm.

Country asymmetries, endogenous product choice and the speed of trade liberalization

In a world with two countries which differ in size, we study theimpact of (the speed of) trade liberalization on firms' profitsand total welfare of the countries involved. Firms correctlyanticipate the pace of trade liberalization and take it intoaccount when deciding on their product choices, which areendogenously determined at the beginning of the game. Competitionin the marketplace then occurs either on quantities or on prices.As long as the autarkic phase continues, local firms are nationalmonopolists. When trade liberalization occurs, firms compete in aninternational duopoly. We analyze trade effects by using twodifferent models of product differentiation. Across all thespecifications adopted (and independently of the price v. quantitycompetition hypothesis), total welfare always unambiguously riseswith the speed of trade liberalization: Possible losses by firmsare always outweighed by consumers' gains, which come under theform of lower prices, enlarged variety of higher average qualitiesavailable. The effect on profits depends on the type of industryanalyzed. Two results in particular seem to be worth of mention.With vertical product differentiation and fixed costs of qualityimprovements, the expected size of the market faced by the firmsdetermines the incentive to invest in quality. The longer the periodof autarky, the lower the possibility that the firm from the smallcountry would be producing the high quality and be the leader in theinternational market when it opens. On the contrary, when trade opensimmediately, national markets do not play any role and firms fromdifferent countries have the same opportunity to become the leader.Hence, immediate trade liberalization might be in the interest ofproducers in the small country. In general, the lower the size of thesmall country, the more likely its firm will gain from tradeliberalization. Losses from the small country firm can arise when itis relegated to low quality good production and the domestic marketsize is not very small. With horizontal product differentiation (thehomogeneous good case being a limit case of it when costs ofdifferentiation tend to infinity), investments in differentiationbenefit both firms in equal manner. Firms from the small country do notrun the risk of being relegated to a lower competitive position undertrade. As a result, they would never lose from it. Instead, firms fromthe large country may still incur losses from the opening of trade whenthe market expansion effect is low (i.e. when the country is very largerelative to the other).

Financial integration, productivity and capital accumulation

Understanding the mechanism through which financial globalization affect economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP)and investments. I provide empirical evidence from a sample of 93 countries observed between 1975 and 1999. The results suggest that financial integration has a positive direct effect on productivity, while it spurs capital accumulation only with some delay and indirectly, since capital follows the rise in productivity. I control for indirect effects of financial globalization through banking crises. Such episodes depress both investments and TFP, though they are triggered by financial integration only to a minor extent. The paper also provides a discussion of a simple model on the effects of financial integration, and shows additional empirical evidence supporting it.

Health investment complementarities under competing risks

Applying the competing--risks model to multi--cause mortality,this paper provides a theoretical and empirical investigation of the positive complementarities that occur between disease--specific policy interventions. We argue that since an individual cannot die twice, competing risks imply that individuals will not waste resources on causes that are not the most immediate, but will make health investments so as to equalize cause--specific mortality. However, equal mortality risk from a variety of diseases does not imply that disease--specific public health interventions are a waste. Rather, a cause--specific intervention produces spillovers to other disease risks, so that the overall reduction in mortality will generally be larger than the direct effect measured on the targeted disease. The assumption that mortality from non--targeted diseases remains the same after a cause--specific intervention under--estimates the true effect of such programs, since the background mortality is also altered as a result of intervention. Analyzing data from one of the most important public health programs ever introduced, the Expanded Program on Immunization (EPI) of the United Nations, we find evidence for the existence of such complementarities, involving causes that are not biomedically, but behaviorally, linked.

Expertise and finance: Mergers motivated by technological change

This paper argues that a large technological innovation may lead to a merger wave by inducing entrepreneurs to seek funds from technologically knowledgeable firms -experts. When a large technological innovation occurs, the ability of non-experts (banks) to discriminate between good and bad quality projects is reduced. Experts can continue to charge a low rate of interest for financing because their expertise enables them to identify good quality projects and to avoid unprofitable investments. On the other hand, non-experts now charge a higher rate of interest in order to screen bad projects. More entrepreneurs, therefore, disclose their projects to experts to raise funds from them. Such experts are, however, able to copy the projects and disclosure to them invites the possibility of competition. Thus the entrepreneur and the expert may merge so as to achieve product market collusion. As well as rationalizing mergers, the model can also explain various forms of venture financing by experts such as corporate investors and business angels.

On landslide risk, resilience and vulnerability of mountain communities in Central-Eastern Nepal

Executive SummaryIn Nepal, landslides are one of the major natural hazards after epidemics, killing over 100 persons per year. However, this figure is an underreported reflection of the actual impact that landslides have on livelihoods and food security in rural Nepal. With predictions of more intense rainfall patterns, landslide occurrence in the Himalayas is likely to increase and continue to be one of the major impediments to development. Due to the remoteness of many localities and lack of resources, responsibilities for disaster preparedness and response in mountain areas usually lie with the communities themselves. Everyday life is full of risk in mountains of Nepal. This is why mountain populations, as well as other populations living in harsh conditions have developed a number of coping strategies for dealing with adverse situations. Perhaps due to the dispersed and remote nature of landslides in Nepal, there have been few studies on vulnerability, coping- and mitigation strategies of landslide affected populations. There are also few recommendations available to guide authorities and populations how to reduce losses due to landslides in Nepal, and even less so, how to operationalize resilience and vulnerability.Many policy makers, international donors, NGOs and national authorities are currently asking what investments are needed to increase the so-called 'resilience' of mountain populations to deal with climate risks. However, mountain populations are already quite resilient to seasonal fluctuations, temperature variations, rainfall patterns and market prices. In spite of their resilience, they continue to live in places at risk due to high vulnerability caused by structural inequalities: access to land, resources, markets, education. This interdisciplinary thesis examines the concept of resilience by questioning its usefulness and validity as the current goal of international development and disaster risk reduction policies, its conceptual limitations and its possible scope of action. The goal of this study is two-fold: to better define and distinguish factors and relationships between resilience, vulnerability, capacities and risk; and to test and improve a participatory methodology for evaluating landslide risk that can serve as a guidance tool for improving community-based disaster risk reduction. The objective is to develop a simple methodology that can be used by NGOs, local authorities and communities to reduce losses from landslides.Through its six case studies in Central-Eastern Nepal, this study explores the relation between resilience, vulnerability and landslide risk based on interdisciplinary methods, including geological assessments of landslides, semi-structured interviews, focus groups and participatory risk mapping. For comparison, the study sites were chosen in Tehrathum, Sunsari and Dolakha Districts of Central/Eastern Nepal, to reflect a variety of landslide types, from chronic to acute, and a variety of communities, from very marginalized to very high status. The study uses the Sustainable Livelihoods Approach as its conceptual basis, which is based on the notion that access and rights to resources (natural, human/institutional, economic, environmental, physical) are the basis for coping with adversity, such as landslides. The study is also intended as a contribution to the growing literature and practices on Community Based Disaster Risk Reduction specifically adapted to landslide- prone areas.In addition to the six case studies, results include an indicator based methodology for assessing and measuring vulnerability and resilience, a composite risk assessment methodology, a typology of coping strategies and risk perceptions and a thorough analysis of the relation between risk, vulnerability and resilience. The methodology forassessing vulnerability, resilience and risk is relatively cost-effective and replicable in a low-data environment. Perhaps the major finding is that resilience is a process that defines a community's (or system's) capacity to rebound following adversity but it does not necessarily reduce vulnerability or risk, which requires addressing more structural issues related to poverty. Therefore, conclusions include a critical view of resilience as a main goal of international development and disaster risk reduction policies. It is a useful concept in the context of recovery after a disaster but it needs to be addressed in parallel with vulnerability and risk.This research was funded by an interdisciplinary grant (#26083591) from the Swiss National Science Foundation for the period 2009-2011 and a seed grant from the Faculty of Geosciences and Environment at the University of Lausanne in 2008.Résumé en françaisAu Népal, les glissements de terrain sont un des aléas les plus dévastateurs après les épidémies, causant 100 morts par an. Pourtant, ce chiffre est une sous-estimation de l'impact réel de l'effet des glissements sur les moyens de subsistance et la sécurité alimentaire au Népal. Avec des prévisions de pluies plus intenses, l'occurrence des glissements dans les Himalayas augmente et présente un obstacle au développement. Du fait de l'éloignement et du manque de ressources dans les montagnes au Népal, la responsabilité de la préparation et la réponse aux catastrophes se trouve chez les communautés elles-mêmes. Le risque fait partie de la vie quotidienne dans les montagnes du Népal. C'est pourquoi les populations montagnardes, comme d'autres populations vivant dans des milieux contraignants, ont développé des stratégies pour faire face aux situations défavorables. Peu d'études existent sur la vulnérabilité, ceci étant probablement dû à l'éloignement et pourtant, les stratégies d'adaptation et de mitigation des populations touchées par des glissements au Népal existent.Beaucoup de décideurs politiques, bailleurs de fonds, ONG et autorités nationales se demandent quels investissements sont nécessaires afin d'augmenter la 'resilience' des populations de montagne pour faire face aux changements climatiques. Pourtant, ces populations sont déjà résilientes aux fluctuations des saisons, des variations de température, des pluies et des prix des marchés. En dépit de leur résilience, ils continuent de vivre dans des endroits à fort risque à cause des vulnérabilités créées par les inégalités structurelles : l'accès à la terre, aux ressources, aux marchés et à l'éducation. Cette thèse interdisciplinaire examine le concept de la résilience en mettant en cause son utilité et sa validité en tant que but actuel des politiques internationales de développement et de réduction des risques, ainsi que ses limitations conceptuelles et ses possibles champs d'action. Le but de cette étude est double : mieux définir et distinguer les facteurs et relations entre la résilience, la vulnérabilité, les capacités et le risque ; Et tester et améliorer une méthode participative pour évaluer le risque des glissements qui peut servir en tant qu'outil indicatif pour améliorer la réduction des risques des communautés. Le but est de développer une méthodologie simple qui peut être utilisée par des ONG, autorités locales et communautés pour réduire les pertes dues aux glissements.A travers les études de cas au centre-est du Népal, cette étude explore le rapport entre la résilience, la vulnérabilité et les glissements basée sur des méthodes interdisciplinaires ; Y sont inclus des évaluations géologiques des glissements, des entretiens semi-dirigés, des discussions de groupes et des cartes de risques participatives. Pour la comparaison, les zones d'études ont été sélectionnées dans les districts de Tehrathum, Sunsari et Dolakha dans le centre-est du Népal, afin de refléter différents types de glissements, de chroniques à urgents, ainsi que différentes communautés, variant de très marginalisées à très haut statut. Pour son cadre conceptuel, cette étude s'appuie sur l'approche de moyens de subsistance durable, qui est basée sur les notions d'accès et de droit aux ressources (naturelles, humaines/institutionnelles, économiques, environnementales, physiques) et qui sont le minimum pour faire face à des situations difficiles, comme des glissements. Cette étude se veut aussi une contribution à la littérature et aux pratiques en croissantes sur la réduction des risques communautaires, spécifiquement adaptées aux zones affectées par des glissements.En plus des six études de cas, les résultats incluent une méthodologie basée sur des indicateurs pour évaluer et mesurer la vulnérabilité et la résilience, une méthodologie sur le risque composé, une typologie de stratégies d'adaptation et perceptions des risques ainsi qu'une analyse fondamentale de la relation entre risque, vulnérabilité et résilience. Les méthodologies pour l'évaluation de la vulnérabilité, de la résilience et du risque sont relativement peu coûteuses et reproductibles dans des endroits avec peu de données disponibles. Le résultat probablement le plus pertinent est que la résilience est un processus qui définit la capacité d'une communauté (ou d'un système) à rebondir suite à une situation défavorable, mais qui ne réduit pas forcement la vulnérabilité ou le risque, et qui requiert une approche plus fondamentale s'adressant aux questions de pauvreté. Les conclusions incluent une vue critique de la résilience comme but principal des politiques internationales de développement et de réduction des risques. C'est un concept utile dans le contexte de la récupération après une catastrophe mais il doit être pris en compte au même titre que la vulnérabilité et le risque.Cette recherche a été financée par un fonds interdisciplinaire (#26083591) du Fonds National Suisse pour la période 2009-2011 et un fonds de préparation de recherches par la Faculté des Géosciences et Environnement à l'Université de Lausanne en 2008.

2009-2013 Iowa Transportation Improvement Program

The Iowa Transportation Improvement Program (Program) is published to inform Iowans of planned investments in our state's transportation system. The Iowa Transportation Commission (Commission) and Iowa Department of Transportation (Iowa DOT) are committed to programming those investments in a fiscally responsible manner. Iowa's transportation system is multi-modal; therefore, the Program encompasses investments in aviation, transit, railroads, trails, and highways. A major component of the Program is the highway section. The FY2009-2013 highway section is financially balanced and was developed to achieve several objectives. The Commission's primary highway investment objective is the safety, maintenance and preservation of Iowa's existing highway system. The Commission has allocated an annual average of $321 million to achieve this objective. This includes $185 million in 2009 and $170 million annually in years 2010-2013 for preserving the interstate system. It includes $114 million in 2009, $100 million in 2010 and $90 million annually in years 2011-2013 for non-interstate pavement preservation. It includes $38 million annually in 2009 and 2010, and $35 million annually in years 2011-2013 for non-interstate bridges. In addition, $15 million annually is allocated for safety projects. However, due to increasing construction costs, flattened revenues and overall highway systems needs, the Commission acknowledges that insufficient funds are being invested in the maintenance and preservation of the existing highway system. Another objective involves investing in projects that have received funding from the federal transportation act and/or subsequent federal transportation appropriation acts. In particular, funding is being used where it will complete a project, corridor or useable segment of a larger project. As an investment goal, the Commission also wishes to advance highway projects that address the state's highway capacity and economic development needs. Projects that address these needs and were included for completion in the previous program have been advanced into this year's Program to maintain their scheduled completion. This program also includes a small number of other projects that generally either represent a final phase of a partially programmed project or an additional segment of a partially completed corridor. The TIME-21 bill, Senate File 2420, signed by Governor Chet Culver on April 22, provides additional funding to cities, counties and the Iowa DOT for road improvements. This will result in additional revenue to the Primary Road Fund beginning in the second half of FY2009 and gradually increase over time. The additional funding will be included in future highway programming objectives and proposals and is not reflected in this highway program. The Iowa DOT and Commission appreciate the public's involvement in the state's transportation planning process. Comments received personally, by letter, or through participation in the Commission's regular meetings or public input meetings held around the state each year are invaluable in providing guidance for the future of Iowa's transportation system. It should be noted that this document is a planning guide. It does not represent a binding commitment or obligation of the Commission or Iowa DOT, and is subject to change. You are invited to visit the Iowa DOT's Web site at iowadot.gov for additional and regular updates about the department's programs and activities.

Pitfalls in the modeling of forward-looking price setting and investment decisions

The present paper makes progress in explaining the role of capital for inflation and output dynamics. We followWoodford (2003, Ch. 5) in assuming Calvo pricing combined with a convex capital adjustment cost at the firm level. Our main result is that capital accumulation affects inflation dynamics primarily through its impact on the marginal cost. This mechanism is much simpler than the one implied by the analysis in Woodford's text. The reason is that his analysis suffers from a conceptual mistake, as we show. The latter obscures the economic mechanism through which capital affects inflation and output dynamics in the Calvo model, as discussed in Woodford (2004).

Credit constraints, firms' precautionary investment and the business cycle

This paper studies the macroeconomic implications of firms' investment composition choices in the presence of credit constraints. Following a negative andpersistent aggregate productivity shock, firms shift into short-term investments because they produce more pledgeable output and because they help alleviate futureborrowing constraints. This produces a short-run dampening of the effects of theshock, at the expense of lower long-term investment and future output, relativeto an economy with no credit market imperfections. The effects are exacerbatedby a steepening of the term structure of interest rates that further encourages ashift towards short-term investments in the short-run. Small temporary shocks tothe severity of financing frictions generate large and long-lasting effects on outputthrough their impact on the composition of investment. A positive financial shockproduces much stronger effects than an identical negative shock, while the responsesto positive and negative shocks to aggregate productivity are roughly symmetric.Finally, the paper introduces a novel explanation for the countercyclicality of financing constraints of firms.

Impactos Decorrentes da Expansão da Cidade de Assomada, Município de Santa Catarina – Cabo Verde

Esta dissertação tem por finalidade evidenciar os “Impactos Decorrentes da Expansão da Cidade de Assomada”. Propõe-se ainda, analisar a relação urbanorural no município de Santa Catarina, Cabo Verde. Essa análise incidiu sobre os dados da sua ocupação, que remonta à 2ª metade do século XIX, no decurso da crise e decadência da primeira cidade de Cabo Verde (Ribeira Grande, atual Cidade- Velha) e às conjunturas regionais e nacionais que condicionaram sua trajetória, bem como, os principais agentes intervenientes na transformação do espaço urbano de Assomada (Estado, proprietários de terra e comerciantes), sobretudo, no período que decorre de 1961 a 2003. A pesquisa empreendida demonstra que a “ruralidade” é um dos aspectos fundamentais de Santa Catarina, abrangendo 21,3% da população rural do território nacional e 37,9% da ilha de Santiago. Do ponto de vista urbanístico, o mapeamento da evolução da cidade de Assomada, referente à área ocupada pelas edificações nesse lapso de tempo, permite-nos perceber um crescimento bastante acelerado desse espaço urbano, sobretudo, a partir dos anos 90. Dois aspectos importantes se encontram na base dessa transformação: a Independência Nacional ocorrida em 1975 e a Emigração. Com a Independência, o país passou a beneficiar de amplos programas de cooperação internacional o que veio a reforçar a sua importância econômica e política, visualizada através de projetos industrializantes, infra-estruturas e equipamentos de diversas naturezas. Esses investimentos foram por sua vez reforçados por aportes dos emigrantes, que passaram a ser um dos parceiros fundamentais no desenvolvimento de Santa Catarina, através de iniciativas privadas e empresariais, como a construção de residências e constituição de empresas. A análise do indicador uso e ocupação do solo urbano permitiu-nos identificar alguns impactos ambientais causados, sobretudo, pela falta de instrumentos de gestão urbanística, ausência de cadastro municipal e uma deficiente fiscalização dos órgãos administrativos.