For better or for worse, till the human development index do us part?

This paper describes the results of research intended to explore the volatility inherent in the United Nations Development Programme's (UNDP) Human Development Index (HDI). The HDI is intended to be a simple and transparent device for comparing progress in human development, and is an aggregate of life expectancy, education and GDP per capita. Values of the HDI for each country are presented in the Human Development Reports (HDRs), the first being published in 1990. However, while the methodology is consistent for all countries in each year there are notable differences between years that make temporal comparisons of progress difficult. The paper presents the results of recalculating the HDI for a simplified sample of 114 countries using various methodologies employed by the UNDP. The results are a set of deviations of recalculated HDI ranks compared to the original ranks given in the HDRs. The volatility that can result from such recalculation is shown to be substantial (+/-10-15 ranks), yet reports in the popular press are frequently sensitive to movements of only a few ranks. Such movement can easily be accounted for by changes in the HDI methodology rather than genuine progress in human development. While the HDRs often carry warnings about the inadvisability of such year-on-year comparisons, it is argued that the existence of such a high-profile index and the overt presentation within league tables do encourage such comparison. Assuming that the HDI will be retained as a focal point within the HDRs, then it is suggested that greater focus be upon more meaningful and robust categories of human development (e.g. low, medium and high) rather than league tables where shifts of a few places, perhaps as a result of nothing more than a methodological or data artefact, may be highlighted in the press and by policy makers. (C) 2003 Elsevier Science B.V. All rights reserved.

Making development simple. The genetic deterministic hypothesis for economic development

This paper discusses the dangers inherent in allempting to simplify something as complex as development. It does this by exploring the Lynn and Vanhanen theory of deterministic development which asserts that varying levels of economic development seen between countries can be explained by differences in 'national intelligence' (national IQ). Assuming that intelligence is genetically determined, and as different races have been shown to have different IQ, then they argue that economic development (measured as GDP/capita) is largely a function of race and interventions to address imbalances can only have a limited impact. The paper presents the Lynne and Vanhanen case and critically discusses the data and analyses (linear regression) upon which it is based. It also extends the cause-effect basis of Lynne and Vanhanen's theory for economic development into human development by using the Human Development Index (HDI). It is argued that while there is nothing mathematically incorrect with their calculations, there are concerns over the data they employ. Even more fundamentally it is argued that statistically significant correlations between the various components of the HDI and national IQ can occur via a host of cause-effect pathways, and hence the genetic determinism theory is far from proven. The paper ends by discussing the dangers involved in the use of over-simplistic measures of development as a means of exploring cause-effect relationships. While the creators of development indices such as the HDI have good intentions, simplistic indices can encourage simplistic explanations of under-development. (c) 2005 Elsevier B.V. All rights reserved.

A method for evaluating alternative landscape management scenarios in relation to the biodiversity conservation of habitats

A perennial issue for land use policy is the evaluation of landscape biodiversity and the associated cost effectiveness of any biodiversity conservation policy actions. Based on the CUA methodology as applied to species conservation, this paper develops a methodology for evaluating the impact on habitats of alternative landscape management scenarios. The method incorporates three dimensions of habitats, quantity change, quality change and relative scarcity, and is illustrated in relation to the alternative landscape management scenarios for the Scottish Highlands (Cairngorms) study area of the BioScene project. The results demonstrate the value of the method for evaluating biodiversity conservation policies through their impact on habitats.

Towards an improved understanding of farmers' behaviour: the integrative agent-centred (IAC) framework

An effective approach to research on farmers' behaviour is based on: i) an explicit and well-motivated behavioural theory; ii) an integrative approach; and iii) understanding feedback processes and dynamics. While current approaches may effectively tackle some of them, they often fail to combine them together. The paper presents the integrative agent-centred (IAC) framework, which aims at filling this gap. It functions in accordance with these three pillars and provides a conceptual structure to understand farmers' behaviour in agricultural systems. The IAC framework is agent-centred and supports the understanding of farmers' behavior consistently with the perspective of agricultural systems as complex social-ecological systems. It combines different behavioural drivers, bridges between micro and macro levels, and depicts a potentially varied model of human agency. The use of the framework in practice is illustrated through two studies on pesticide use among smallholders in Colombia. The examples show how the framework can be implemented to derive policy implications to foster a transition towards more sustainable agricultural practices. The paper finally suggests that the framework can support different research designs for the study of agents' behaviour in agricultural and social-ecological systems.

Provision of environmental output within a multi-output distance function approach

This paper redefines technical efficiency by incorporating provision of environmental goods as one of the outputs of the farm. The proportion of permanent and rough grassland to total agricultural land area is used as a proxy for the provision of environmental goods. Stochastic frontier analysis was conducted using a Bayesian procedure. The methodology is applied to panel data on 215 dairy farms in England and Wales. Results show that farm efficiency rankings change when provision of environmental outputs by farms is incorporated in the efficiency analysis, which may have important political implications.

The impact of buffer zone size and management on illegal extraction, park protection and enforcement

Many protected areas or parks in developing countries have buffer zones at their boundaries to achieve the dual goals of protecting park resources and providing resource benefits to neighbouring people. Despite the prevalence of these zoning policies, few behavioural models of people’s buffer zone use inform the sizing and management of those zones. This paper uses a spatially explicit resource extraction model to examine the impact of buffer zone size and management on extraction by local people, both legal and illegal, and the impact of that extraction on forest quality in the park’s core and buffer zone. The results demonstrate trade-offs between the level of enforcement, the size of a buffer zone, and the amount of illegal extraction in the park; and describe implications for “enrichment” of buffer zones and evaluating patterns of forest degradation.

REDD+ and community-controlled forests in low-income countries: any hope for a linkage?

Deforestation and forest degradation are estimated to account for between 12% and 20% of annual greenhouse gas emissions and in the 1990s (largely in the developing world) released about 5.8 Gt per year, which was bigger than all forms of transport combined. The idea behind REDD + is that payments for sequestering carbon can tip the economic balance away from loss of forests and in the process yield climate benefits. Recent analysis has suggested that developing country carbon sequestration can effectively compete with other climate investments as part of a cost effective climate policy. This paper focuses on opportunities and complications associated with bringing community-controlled forests into REDD +. About 25% of developing country forests are community controlled and therefore it is difficult to envision a successful REDD + without coming to terms with community controlled forests. It is widely agreed that REDD + offers opportunities to bring value to developing country forests, but there are also concerns driven by worries related to insecure and poorly defined community forest tenure, informed by often long histories of government unwillingness to meaningfully devolve to communities. Further, communities are complicated systems and it is therefore also of concern that REDD + could destabilize existing well-functioning community forestry systems.

An experimental test of response consistency in contingent valuation

We compare hypothetical and observed (experimental) willingness to pay (WTP) for a gradual improvement in the environmental performance of a marketed good (an office table). First, following usual practices in marketing research, subjects’ stated WTP for the improvement is obtained. Second, the same subjects participate in a real reward experiment designed to replicate the scenario valued in the hypothetical question. Our results show that, independently of the degree of the improvement, there are no significant median differences between stated and experimental data. However, subjects reporting extreme values of WTP (low or high) exhibit a more moderate behavior in the experiment.

Insiders, outsiders, and the role of local enforcement in forest management: an example from Tanzania

In low-income countries, both nearby local villagers, “insiders”, and non-locals, “outsiders”, extract products from protected forests even though their actions are illegal. Forest managers typically combine enforcement and livelihood projects offered to nearby communities to reduce this illegal activity, but with limited budgets cannot deter all extraction. We develop a game theoretic model of a forest manager's decision interacting with the extraction decisions of insiders and outsiders. Our analysis suggests that, depending on the relative ecological damage caused by each group, budget-constrained forest managers may reduce total forest degradation by legalizing “insider” extraction in return for local villagers' involvement in enforcement activities against outsiders.

The sustainable value approach: a clarifying and constructive comment

Recently, the original benchmarking methodology of the Sustainable Value approach became subjected to serious debate. While Kuosmanen and Kuosmanen (2009b) critically question its validity introducing productive efficiency theory, Figge and Hahn (2009) put forward that the implementation of productive efficiency theory severely conflicts with the original financial economics perspective of the Sustainable Value approach. We argue that the debate is very confusing because the original Sustainable Value approach presents two largely incompatible objectives. Nevertheless, we maintain that both ways of benchmarking could provide useful and moreover complementary insights. If one intends to present the overall resource efficiency of the firm from the investor's viewpoint, we recommend the original benchmarking methodology. If one on the other hand aspires to create a prescriptive tool setting up some sort of reallocation scheme, we advocate implementation of the productive efficiency theory. Although the discussion on benchmark application is certainly substantial, we should avoid the debate to become accordingly narrowed. Next to the benchmark concern, we see several other challenges considering the development of the Sustainable Value approach: (1) a more systematic resource selection, (2) the inclusion of the value chain and (3) additional analyses related to policy in order to increase interpretative power.

An aggregate resource efficiency perspective on sustainability: a Sustainable Value application to the EU-15 countries

The Sustainable Value approach integrates the efficiency with regard to environmental, social and economic resources into a monetary indicator. It gained significant popularity as evidenced by diverse applications at the corporate level. However, its introduction as a measure adhering to the strong sustainability paradigm sparked an ardent debate. This study explores its validity as a macroeconomic strong sustainability measure by applying the Sustainable Value approach to the EU-15 countries. Concretely, we assessed environmental, social and economic resources in combination with the GDP for all EU-15 countries from 1995 to 2006 for three benchmark alternatives. The results show that several countries manage to adequately delink resource use from GDP growth. Furthermore, the remarkable difference in outcome between the national and EU-15 benchmark indicates a possible inefficiency of the current allocation of national resource ceilings imposed by the European institutions. Additionally, by using an effects model we argue that the service degree of the economy and governmental expenditures on social protection and research and development are important determinants of overall resource efficiency. Finally, we sketch out three necessary conditions to link the Sustainable Value approach to the strong sustainability paradigm.

A stated preference valuation of the non-market benefits of pollination services in the UK

Using a choice experiment survey this study examines the UK public's willingness to pay to conserve insect pollinators in relation to the levels of two pollination service benefits: maintaining local produce supplies and the aesthetic benefits of diverse wildflower assemblages. Willingness to pay was estimated using a Bayesian mixed logit with two contrasting controls for attribute non-attendance, exclusion and shrinkage. The results suggest that the UK public have an extremely strong preference to avoid a status quo scenario where pollinator populations and pollination services decline. Total willingness to pay was high and did not significantly vary between the two pollination service outputs, producing a conservative total of £379M over a sample of the tax-paying population of the UK, equivalent to £13.4 per UK taxpayer. Using a basic production function approach, the marginal value of pollination services to these attributes is also extrapolated. The study discusses the implications of these findings and directions for related future research into the non-market value of pollination and other ecosystem services.

Present bias predicts participation in payments for environmental services: evidence from a behavioral experiment in Uganda

Farmers are necessary agents in global efforts to conserve the environment now that croplands and pastures together constitute the largest terrestrial system on Earth – covering some 48% of ice-free land surface. Whereas standard economic models predict that farmers will participate in conservation programs so long as they are profitable, empirical findings from behavioral economics point to a number of normally unobservable preferences that may influence the decision-making process. This study tests, for the first time, whether heterogeneity in behavioral preferences correlates with decisions to participate in Payments for Environmental Services (PES) programs. We elicit individual trust and time preferences using economic experiments and link resulting measures to household survey data and participation decisions in a Ugandan PES program. We find that farmers who exhibit a preference for proximate gains – present-biased preferences – are 47.7% more likely to participate in the program than those who show time-consistent or future-biased preferences. This result has implications for ongoing and planned PES programs involving farmers, particularly in Africa, by highlighting a potential relationship between payment timing and participation, and further validates the use of behavioral experiments in explaining real-world decisions.

Compensation and Rewards for Environmental Services (CRES) and efficient design of contracts in developing countries. Behavioral insights from a natural field experiment

The use of economic incentives for biodiversity (mostly Compensation and Reward for Environmental Services including Payment for ES) has been widely supported in the past decades and became the main innovative policy tools for biodiversity conservation worldwide. These policy tools are often based on the insight that rational actors perfectly weigh the costs and benefits of adopting certain behaviors and well-crafted economic incentives and disincentives will lead to socially desirable development scenarios. This rationalist mode of thought has provided interesting insights and results, but it also misestimates the context by which ‘real individuals’ come to decisions, and the multitude of factors influencing development sequences. In this study, our goal is to examine how these policies can take advantage of some unintended behavioral reactions that might in return impact, either positively or negatively, general policy performances. We test the effect of income's origin (‘Low effort’ based money vs. ‘High effort’ based money) on spending decisions (Necessity vs. Superior goods) and subsequent pro social preferences (Future pro-environmental behavior) within Madagascar rural areas, using a natural field experiment. Our results show that money obtained under low effort leads to different consumption patterns than money obtained under high efforts: superior goods are more salient in the case of low effort money. In parallel, money obtained under low effort leads to subsequent higher pro social behavior. Compensation and rewards policies for ecosystem services may mobilize knowledge on behavioral biases to improve their design and foster positive spillovers on their development goals.